Features
8 avr 20

71% of multinational companies provide benefit cars in Latin America

With 71% of multinational companies providing cars as an employee benefit in Latin America, the region is not far from its European counterparts across the Atlantic Ocean of which 81% of companies offer company car benefits, according to the 2019 Global Fleet Survey (see table below).  

However, unlike Europe, Latin America has a culture that is keener to buying vehicles than leasing them, something that could be understandable for individuals but not so much for the corporate market, according to Andres Hernandez (pictured) who is Latin America CEO for international fleet management company TraXall.

For instance, while full-service leasing represents approximately 73% of the preferred finance solution for corporate cars in Latin America, it is about 90% in Europe. 

Besides culture, another thing that is hindering leasing to some extent in Latin America is the high cost of acquiring these vehicles when compared to Europe and North America. Increasing the leasing market is a gradual process and we have a long way to go, says Mr. Hernandez.  

Percent of multinational companies providing company cars for its employees in Latin America in 2019 (source: Willis Towers Watson)

The scenario in Latin America, however, is changing as the total fleet size of multinational vehicle leasing companies in the region rose 65% year-over-year in 2019 to 366,988 units, according to a report in the 2020 Fleet LatAm Directory. Meanwhile, international leasing companies continue to enter the Latin American market, something that will likely boost the market even more in the years to come.

One common misconception in Latin America, according to the executive, is that vehicle leasing does not require fleet management services and the two are actually competitors. “This is not true,” he told Fleet LatAm.

When looking through the eyes of Europe and the United States, leasing and fleet management goes hand in hand with each other, generating savings and improving efficiency for companies, he said.

As for TraxAll, it is 100% independent and is not part of any automotive, financial or logistics group. According to Mr. Hernandez, this allows the company to maintain impartiality when dealing with suppliers for its customers.

The company provides several services, including maintenance, insurance policy management, accident reduction, documentation and others. While it currently manages approximately 7,400 cars in Latin America, the company is expecting to reach a fleet of 10,000 by 2023. TraXall manages approximately 188,000 vehicles worldwide. 

If you would like to know how to approach the vehicle leasing exercise in Latin America, consulting Fleet LatAm's Expert Inisights is a good first step. Our media Fleet LatAm is publishing a monthly issue of the Fleet LatAm Expert Insights, a comprehensive analysis document you can download to stay up to speed about vehicle fleet management in Latin America. This exclusive content is written by leading experts from the field. All Fleet LatAm Expert Insights will be available in English, Spanish and Portuguese.

The first issue, 'How to tender your leasing contracts in Latin America', is now available to download.

Authored by: Daniel Bland