Dan Ingle, Cox Automotive: Kelley Blue Book kicks off LatAm debut
US-based automobile pricing company Kelley Blue Book (KBB), subsidiary of Cox Automotive, is kicking off operations in Latin America, and Brazil is the starting gate. VP of international business development for Cox Automotive, Dan Ingle, tells us how it's going to happen.
When do you expect KBB to be operating in Brazil?
As a test, we started our new global platform in March of this year in Portugal. Things are going well and, at the beginning of October, we are launching it in Brazil through a partnership with online car sales portal iCarros, a subsidiary of local bank Itaú-Unibanco. KBB is better than the current option and a first for us in Latin American.
Why is KBB better than Brazil's current automobile pricing table Fipe?
What differentiates us is that our process involves the combination of art and science. Our foundation is science. We use big data and various statistics from wholesale and resale markets to put together data. This data is fed into a series of sophisticated algorithms to develop linear regression models which forecast depreciation curves.
Fipe and other automobile value processes around the world are not as critical. Basically, many of them take last month's data and calculate an average and this is what determines a price.
As for art, we have local market experts who know more about local tendencies specifically from a Brazilian's point of view. They will consider the scientific data and, if needed, do some fine tuning to determine a price.
Are you planning to expand to other Latin American countries?
We have plans to expand throughout the region but we are really focused on Brazil right now. We want to make Brazil work first. We are talking to many countries but no concrete plans have been made as of yet.
Private party leasing is not very common in Brazil, but the country is eying North American and European leasing models. How is leasing coming along in the United States?
Leasing in the US has grown in recent years and it is getting close to 30% now. Most are closed end leases so customers can make an educated decision at the end of the contract. They can either keep the car by paying it off or use the existing equity to trade it in for another car.
Leasing in Europe is also quite heavy but it is operational leasing. The leasing company covers cost such as maintenance but the lesee never ends up owning the car. The car just gets rotated from one lesee to another. Selecting the right model really depends on your needs.
As many Global Fleet readers are fleet managers, could you give us an idea of how KBB can help them?
Fleets are an asset. As such, KBB can help fleet managers by carry out a detailed portfolio analysis to determine their asset value. Some of our clients are car rental agencies, banks, or any corporations with a large number of cars.
It is very important for fleet managers to keep an eye on their portfolio so that they can forecast depreciation trends. With this, they will know exactly when they need to remove their cars from their fleet and get them off their books.