Fleet trends for Latin America in 2018

Global Fleet spoke with Kent Bjertrup, regional director for Latin America at ALD,  Marcelo Tezoto, senior manager at GM and David Madrigal, president of Element Fleet Management who shared their views on Latin American fleet market trends for 2018.

The Latin American market is vast and not quite as harmonised as the European market. Countries differ very much in terms of taxation, economy and fleet practices. Fleet managers face the challenge of striking the right balance between local and regional fleet harmonisation.

1. Outsourcing

In a number of large Latin American countries such as Brazil and Argentina, the fleet sector is recovering after a period of economic turmoil. More companies are transitioning their fleets from outright purchase to fleet management or even full-service leasing as companies increasingly want to focus on their core business. 

Inflation is now under control and interest rates are lower, further boosting this trend. The cost of funding is now lower and it is easier to get capital for expansion.

2. More safety equipment

Safety standards are evolving. In more and more Latin American countries, large companies are moving away from cheap models with little safety equipment and are now preferring international safety standards for their whole fleets (including ABS, airbags, seatbelts for all seats). Airbags are now mandatory on all new cars produced in Brazil, for instance.

3. Telematics

Telematics are still often focused more on personal security solutions (geolocalisation, immobilising stolen cars, ...). There is less interest in driver behaviour analyses but such services are also becoming more common as economies of scale are making them more accessible.

4. Alternative powertrains

Interest in hybrids will go up in the light of mobility and environmental issues. The Brazilian government might lower taxes for EVs to make them more attractive, but such measures are still under discussion.

5. Residual values

In Mexico, the market is gradually adopting market residual values instead of the traditional low residual values that were aimed at facilitating the purchase of the car by the driver at the end of the lease.

6. Tougher enforcement

In some countries, governments are increasingly focusing on accident prevention and put in place more stringent enforcement and fines. This has an impact on drivers' behaviour. In other markets, disciplinary measures remain rare and drives seldom follow any real training.

7. Act local

In a context of widely differing local markets, fleet mangers need to find the right solution for each driver on each market. This also requires taking into account factors such as the density of an OEMs dealer network. 

8. Carsharing

It's early days for carsharing on most of the Latin American continent but interest is growing, helped by traffic congestion and rising environmental awareness in large cities.

Picture: traffic in Buenos Aires