14 oct 19

Car rentals, a driving force in Brazil - ABLA

Representing the economic sector which buys the most vehicles from automakers and being a main supplier of cars for mobile app ride hailing companies, the car rental and fleet leasing industry in Brazil is a driving force that cannot be overlooked.

While new car and light commercial vehicle (LCV) registrations by the vehicle rental industry jumped 65% year-over-year in 2017 to 359,702 units, the industry showed another 15% increase in 2018 to 412,753 units, according to data from Brazil’s car rental association ABLA.

In terms of market share, new vehicle registrations from the rental industry represented 11% of Brazil’s total market in 2016, approximately 16.6% in 2017, and 19% in 2018.

While a total of 119,318 new subcompact hatchbacks were registered in 2018 (28.9% of the total market), 98,749 entry level subcompact cars were registered (23.9% of the market), and 74,888 compact sedans (18.1% of the market), says ABLA.

As for the brands, General Motors led the pack with 96,563 car rentals being sold in 2018 (23.4% market share), followed by FCA with 69,535 units (16.9% share) and Volkswagen with 68,920 units (16.7%). The best-selling model was the subcompact hatch Chevrolet Onix with 61,425 units being sold.

Although renting vehicles requires companies to make ongoing fixed payments, "keep in mind that fleet operators do not need to worry about responsibilities such as licensing and registration, annual taxes, insurance [theft, fire, accident protection], buying spare parts, maintenance, and even legal advice in many cases," ABLA president Paulo Miguel Junior told Fleet LatAm. 

Paulo Miguel Junior speaks at ABLA 14th international forum in early October, 2019 (source: Fleet LatAm)

Moreover, besides being able to redirect your captial investments to areas other than direct purchases, fleet managers who are renting face less downtime during fleet renewal periods. 

In the end, make sure you carry out proper due diligence before deciding on whether to rent or buy. And if you do, you will find that there are a lot of suppliers in Brazil for you to choose from.

Authored by: Daniel Bland