How to maintain sustainable fleet operations in Latin America
With the ever-changing regulatory environments in many countries, being sustainable is a growing mandate in companies throughout Latin America and a challenging goal which must be carried out appropriately, according to some of the fleet and mobility experts speaking at Fleet LatAm Conference 2023 in Mexico City.
Being sustainable could mean developing a company car policy (CCP) which mandates the usage of green fuel and adopts soft mobility options such as car sharing and bike leasing, according to Ricardo de Bolle (pictured left) who is Global Business Development Director for Latin America for multinational vehicle leasing and fleet management company Arval.
Many questions arise in companies, especially when it comes to those with global fleets based out of Europe which impact international fleet clients in South America. “While knowing the keys to your strategic approach is needed, also know the mind-set of your fleet managers,” Mr. de Bolle told Fleet LatAm.
In South America, costs and CSR (corporate and social responsibility) oppose each other, or to say being more sustainable usually implies the need to increase expenses. As such, there are still many more internal combustion engine (ICE) vehicles in Latin America owing to high EV prices but also a lack of public charging facilities.
According to the Arval Mobility Observatory barometer for 2023, ICE represents 96% of the market in Peru while the global trend drops to approximately 60%. The rest of Latin America is more closely aligned with Peru.
As Arval has a global alliance with Element Fleet Management, Arval Latin America covers South America while Element Fleet Management is the largest player in Mexico.
Despite these challenges, many companies are seeking to transition their fleets to EVs, according to Olivier Deleau (pictured right) who is New Business Deputy General Manager for Lease and Fleet Management based out of Mexico.
Although behind regions such as Europe, fleet managers in Mexico are eager to gain more understanding of the economics of electric mobility and they know that the transition to electrified transportation is around the corner, says the executive.
Many challenges come with this transition, but Lease and Fleet Management offers a solution with an end-to-end approach which will help with the smooth transition toward electrification,” Mr. Deleau told Fleet LatAm.
The sustainability trend also continues at ALD-LeasePlan in Latin America. “Mitigating carbon footprint is becoming a key deciding factor in terms of defining the fleet strategy of companies and this has resulted in many regional firms having car catalogues that stipulate minimum CO2 emission requirements,” says Sergio Lecue (pictured left) who is Latam regional key accounts director for ALD-LeasePlan.
To achieve this, On one hand, there are some companies willing to increase their budget so that they can afford the higher total cost of ownership (TCO) that comes from a green fleet. And on the other hand, there are companies downgrading car models in order to meet their expense budgets with targeted CO2,” Mr. Lecue told Fleet LatAm.
For the fleet manager, being sustainable is one thing but operations also need to be financially feasible. According to Karina Uribe (pictured right) who is Fleet and Travel regional manager for Pfizer pharmaceuticals in Mexico, balancing sustainability and the economics of fleet management requires having a strong grasp of all the regional markets you work in and being aware that you will not be able to apply everything in every market at the same time.
“Besides knowing the available infrastructure, you must understand the government incentives, the capacity of brand models, and the overall maturity level of each market you work in. Thereafter, develop clear strategies (short, medium and long term) and then put together detailed steps to achieving net zero emissions,” Ms. Uribe told Fleet LatAm.
For balanced deployment, first move forward with the steps that make more sense to the business and that means those that make a real impact. “Besides those with clear communication and those who have set clear targets, kick off with steps that define CO2 emission reduction policies and analyze financial impacts, all while falling in line with the company’s budget,” says the fleet manager.
As a last note, keep in mind that ethanol in Brazil is an interesting option you may want to consider for your fleet. It is already available in practically every gas station and, according to Anfavea, approximately 83% of the vehicles sold in the country are Flex Fuel (accepting both gasoline and ethanol).
For more on these and many other fleet and mobility topics, reserve your ticket now for the upcoming Fleet LatAm Conference in Mexico City taking place 25-26 September. See you there!