16 mai 23

“Definitely, things are cooking in LatAm”

If you want to learn anything about the Latin American fleet market, there was no better place for you to be than in the Fleet LatAm Expert Meeting Monday afternoon in Cascais, on the first day of the Global Fleet Conference 2023. Even though, as Fleet LatAm Advisory Board chairman Pascal Serres admitted, some of the figures he presented were a bit wobbly. 

Exact figures on fleet sizes and market shares in LatAm are hard to come by, which is why Mr Serres’ effort at collating them was all the more valuable – lots of smartphones went up in the audience to take pictures of his PowerPoint slides. 

Strong in telematics

Did you know that:

  • 4.9 million cars were registered in LatAm last year, versus 5.9 million in 2019. Brazil (2.1 million) and Mexico (1.1 million) make up the bulk of the market. 
  • Corporate sales amounted to 1.4 million, of which daily rentals were 600,000. There were an estimated 400,000 new full service leasing contracts. 
  • Brazil represents 50% of the total LatAm leased cars market, Mexico 34%. Chili is 9% and Colombia 4%. “There is virtually no leasing in Argentina, due to that country’s financial problems”, said Mr Serres. 

Mr Serres went on to outline the size of players, markets and trends. The second-hand market is still very fragmented in LatAm, but the region is particularly strong in telematics. “I know some of the fleets of companies present in the room are 100% connected”, he said. 

Local players

Given the particular and diverse nature of fleet management in LatAm, how do you roll out the right strategy? Moderator Steven Schoefs wanted to know, Paula Diniz Oliveira (Global Fleet Manager, Zoetis) and David Trujillo (Regional Fleet Manager Procurement, MSD) provided their views. 

Do you get your supply from local heroes, or big players? “We give flexibility to the markets,” said Ms Diniz Oliveira. “What counts is that the driver gets the services they need to do their job. Local players are sometimes better – giving more information, and more competitive prices.”

How about the North American model – open end leasing – versus the full service model typical for Europe? “We think full service leasing is a good solution, and we’d like to see it increasing in the coming years. The job will be to convince people”, said Mr Trujillo. 

How do you mitigate rising prices? “Try and source similar vehicle categories from other providers. Extend contracts. But there is no magical solution. Price increases happen anyway. So: benchmark a lot, work closely with finance to strategise and forecast cost”, added Ms Oliveira. 

Route allocation

Next up was Juan Cardona (VP LatAm at Geotab), explaining how connectivity can be an engine for regional success. Telematics is much more than GPS; it’s a multifaceted tool to gather and analyse data – and implement solutions that save money and increase efficiency. Just one example: a large beverage company fleet in LatAm used telematics to decrease collisions by 30%, save 3% in fuel consumption, increase efficiency in route allocation by 10% and increase overall productivity by 11%. And another: “50% of at-fault collisions are caused by 30% of drivers.” Knowing who they are means they can be retrained – or if necessary, taken off the road. 

Closing the LatAm Expert Meeting was a panel discussion with three LatAm experts, Kent Bjertrup (LatAm director at ALD Automotive), Manuel Tamayo (CEO of Element Mexico) and Ricardo de Bolle (LatAm sales director at Arval). 

Mr Bjertrup extolled the fleet market potential of the region: “We might not be as mature yet as other markets, but there’s the sheer size of the fleet market in LatAm to consider. And in some respects – notably telematics – LatAm already is more advanced than Europe. So definitely, things are cooking in LatAm.”

Pathways to sustainability

And yet even in telematics, there’s still a lot to achieve, noted Mr Tamayo. “There is great demand for telematics, but not everybody knows how to use it.” Certainly in terms of cost and safety, the technology can make a big difference: “In Mexico, there are about 340,000 accidents annually related to fleet. The right (telematics-based) training could reduce that by 20% - that’s 70,000 fewer accidents, a massive reduction.”

The region might be less developed than others in terms of charging infrastructure, but there are other pathways to sustainability – for example Brazil’s reliance on flex fuels, and Chile’s development of a similar green fuel. “Eight out of 10 cars in Brazil can drive on ethanol. It’s called a ‘clean fossil fuel’, and it’s a lot better than petrol or diesel. However, the production of these fuels isn’t always so green”, remarked Mr De Bolle. 

For much more on the Latin American fleet and mobility ecosystem, mark 25 and 26 September in your diary. That’s when the 2023 Fleet LatAm conference will take place in Mexico City – with regional people, in regional languages, and with an extended list of regional awards. 

Pictured: the attendees of the Fleet LatAm Expert Meeting at the Global Fleet Conference 2023 in Cascais, Portugal 

Image: Benjamin Brolet

Authored by: Frank Jacobs