9 Sep 19

Total Cost of Mobility in Mexico: what is missing?

Mexico is a very large country with an extensive road network infrastructure filled with cars, trucks and buses, the main means of transport used between cities.

While intermunicipal buses have good coverage nationwide, municipal buses do not. Although the latter is a low-priced alternative, improvements are needed in comfort and safety.

The subway is another mean for public transportation, but implementation is expensive and time consuming. As such, only Mexico City, Monterrey and Guadalajara have subway lines. Bus Rapid Transportation (BRT) represents an emerging model. However, it does not have the safety and coverage to be an alternative for corporate mobility. Finally, planes are used for long distance travels. 

In the end, when it comes to reliability and comfort, corporate fleet managers still prefer automobiles, a safe alternative for both employee and product transportation, according to corporate mobility expert Cristian López.

What does Mexico Lack?

  • Sales and after sales processes not unified: Original Equipment Manufacturers (OEM’s) have nationwide coverage, but dealerships are privately owned. For fleet managers vehicle delivery is time-consuming and aftersales services represent cost uncertainty. 
  • Poor insurance culture: Car insurance is mandatory as from 2019 but only for interstate highways. Therefore the proportion of insured vehicles from the total in Mexico is low. This represents higher costs for car owners that do have insurance. If insurance companies had larger portfolios, they could offer more competitive prices.
  • Inefficient logistics: Despite a network of some 378,923 km, Mexico lacks road infrastructure. Fast and safe highways do exist, but they require tolls.
  • No regulatory standard: Like in the United States, laws for car registration and inspection in Mexico differ from state to state, something that could create difficulty for a nation-wide company.
  • Software platform providers yet to mature: Only a few car-sharing and ride-sharing players exist. Ride-hailing players like Uber or Cabify are growing but still compete with traditional taxis. Currently, there are no large-scale parking providers offering payment possibilities on a nationwide scale.

VWFS Solutions

Established in Mexico more than 45 years ago, Volkswagen Financial Services (VWFS) offers expert corporate mobility solutions which are both simplified and convenient, one being Full-Service Leasing, a mobility product launched in August with the support of the Miles platform developed by Sofico.

Besides Volkswagen passenger cars, light commercial vehicles, trucks and buses, the VWFS portfolio consists of the brands SEAT, Audi, Porsche, and MAN and Scania heavy duty and long-haul trucks, all of which are managed through a national dealer network supporting vehicle deliveries.

VWFS has also integrated vehicle delivery as well as Maintenance and Repair services along with its dealership network to simplify Fleet Manager processes. Other services include Relief Vehicle (Hertz), Road Tax Administration (Red T), Telematics (Lo Jack), Insurance and Extended Warranty providers.

“Besides providing the best and most simplified corporate fleet mobility solutions in Mexico, our objective is to go from Total Cost of Ownership to a Total Cost of Mobility,” says Mr López, VWFS Full Service Leasing head of operations.

For more information, please contact Volkswagen Financial Services Mexico.

Volkswagen Financial Services Mexico is a Volkswagen Financial Services AG subsidiary that includes Volkswagen Leasing, S.A. de C.V., Volkswagen Bank, Institución de Banca Múltiple S.A., and Volkswagen Servicios, S.A. de C.V. The key business fields embrace dealer and customer financing, leasing, the bank and insurance business, fleet management and mobility offers for Volkswagen, SEAT, Audi, Ducati, Porsche, MAN, Scania, Das Welt Auto and Volkswagen Vehículos Comerciales brands.