Keeping your eye on the Central America fleet market

When analyzing the vehicle fleet market in Central America, among the key countries to consider when eyeing the region are Guatemala, Costa Rica, and Panama.

This is mainly due to the size of their car parks. While Guatemala is home to some 3.76 million vehicles (approximately one vehicle per 4.5 inhabitants), Costa Rica has about 1.5 million vehicles (one in four inhabitants), and Panama some 1.22 million vehicles (one in three inhabitants). Basically all are imported.

In terms of their economies, Guatemala and its 17.6 million residents generate a GDP of US$75.6 billion (2017) or US$4,473 per capita. Inflation is 4.37%, the benchmark interest rate is 2%, and unemployment is 2.3% (2017).
As for Costa Rica, it has a population of 4.91 million and a GDP of US$60 billion or US$12,220 per capita. Inflation is 2.86%, interest 5%, and unemployment, 11.9%.

Meanwhile, Panama and its 4 million inhabitants put out a GDP of US$65.1 billion or approximately US$16,275 per capita. Its inflation is actually -0.6%, its interest 1.36% (2018), and unemployment is about 6% (2018).

As for the automobile industry, new vehicle imports have been falling in all three countries over the past couple of years, a contrast from some of the larger countries in South America. Toyota is the best-selling brand in Central America while it is Chevrolet in South America and Nissan in Mexico.

Toyota Hilux, best selling vehicle in Panama and top selling pickup in the region (source: Toyota)

Maturing fleet and lease market
Regarding the corporate market in Central America, it needs maturing as there isn’t much in terms of corporate fleet operations. A major player and the first regional leasing company in the region, however, is Guatemala-based Arrend Leasing.

"We manage a total of 5,368 vehicles in six countries, being Guatemala (4,125 cars), El Salvador (204), Honduras (624), Nicaragua (189), Panama (152), and Costa Rica (74)," CEO Mirella Juarez told Fleet LatAm. 

When considering its partnership with ALD Automotive & Wheels Inc, the group serves a total of 54 countries worldwide.

Consideraing the largest market, Guatemala, new vehicles sales fell 3.5% in 2018 to approximately 27,592 units and corporate fleet represented 3% of the total car park (100,000 vehicles). Of this, 87% run on gasoline, 11.6% on Diesel, and 1.4% other.
One thing that fleet managers must keep in mind in the region is the lack of adequate road infrastructure in Central America.

In a 38-country study by mobile app company Waze regarding driver satisfaction, Costa Rica, Panama, and Guatemala were ranked 29, 35, and 36 respectively, while El Salvador came in last at No. 38. Bad traffic, lack of driver services, and running out of fuel brought rankings down in these countries.

One thing to look forward to this year, however, is the gradual growth of electric vehicles, especially in Costa Rica. 
As a follow-up to the country’s goal of installing 61 electric vehicle charging stations in 2018, besides installing 28 EV fast-charging stations in 2019, Costa Rica Electricity Institute (ICE) will install 40 more EV recharging stations by 2023 (eight per year).

As you can see, there are many factors to consider when operating your fleet in Central America.

To learn more, make sure to visit WikiFleet for more on the profile of the vehicle fleet and mobility industries in the region.