20 sep 22

Fleet LatAm Business Networking Group in Mexico discuss TCO-control and EVs

The latest Fleet LatAm Business Networking Group (BNG) meeting just wrapped up in the Marquis Reforma Hotel in Mexico City, kicking off the 2022 Fleet LatAm Conference which is taking place 19-20 September, and this is what we learned.

When considering the vehicle fleet market in Mexico, a move toward hybrids and electric vehicles (EV) is certainly on the rise, according to data from local vehicle leasing association AMAVE provided by General Manager Liliana Anaya.

“While passenger cars and light to medium duty commercial vehicles are showing a 15.9% increase in business in 2022, heavy duty truck activity is up 27%. As for hybrid and EV contracts, they are up 54%,” Ms. Anaya said at the BNG meeting attended by more than 100 fleet professionals.

According to AMAVE, 61% of their contracts include fleet management service as well as rental or leasing, 21% are for rental or leasing only, and 18% pertain to fleet management services only. Of the 18 companies associated with AMAVE, 11 are leasing and fleet management companies while seven are rent-a-car.

Although fleet electrification is on the eyes of many, when it comes to fleet management in Latin America, one of the main challenges is combining sustainability with TCO, according to Latam Fleet Category Manager at Novartis pharmaceuticals Rodrigo Monroy, and Latam fleet and travel manager at Pfizer pharmaceuticals Karina Uribe.

This entails making the decision to use conventional internal combustion engine vehicles, mild hybrids, plug-in hybrids, or all-electrics. 

“After defining emission reduction targets with your team, carrying out a financial analysis which includes the cost of vehicles as well as expenses associated with fuel, EV charging, and others. And make sure to engage well with OEMs, charging companies, and certified electricians,” the fleet managers said.

To facilitate the transition to EVs, government collaboration with a focus on emission reduction is key, not to mention the importance of charging point installations. 

“And once you opt for EVs, remember that you should approach driving them differently. For instance, the way you brake affects how your battery is charged. All of this needs to be optimized,” said Juan Cardona who is AVP of Sales in Latin America for telematics provider Geotab.

In terms of range anxiety, it may be an issue for some but not for all. "The average distance traveled in some of our fleets is 30km or less per day. If considering that EVs nowadays have a range of at least 150-180 km per charge, you are good to go almost all week with only one charge," said Manuel Tamayo who heads Element Fleet Management operations in Mexico.

Pretty much everyone is curious about having an EV today, said Ms. Uribe. However, a lot of them think of EVs as the smaller vehicle alternative, according to Mr. Monroy, and this is likely due to the need to keep cost down for these types of vehicles.  

TCO priority to EV implementation

In the end, look toward EVs but fleet operators must remember that TCO is paramount. Besides dealing with inflation and exchange rate fluctuations, among the things to consider when managing TCO today are dealing with the lack of spare or replacement parts, longer lead times, microchip shortages, and backlogs. 

Remember to develop and maintain strategic relationships with your suppliers which could call for longer vehicle life cycles or extended contracts. Also prepare for alternative mobility options and develop safety plans that are not only robust but cost effective.

Join us for the next Business Networking Group (BNG) meeting taking place on 13 December, this time online! 

Photo: left to right, Manuel Tamayo, Juan Cardona, Karine Uribe, Rodrigo Monroy, and Pascal Serres (Fleet LatAm Chairman and moderator of the meeting) (copyright: Fleet LatAm, Daniel Bland) 


Authored by: Daniel Bland