Andres Jaramillo, SEPA Colombia: From car own to car rent

Colombia is transitioning from a car purchasing culture to a car renting culture, according to Andres Jaramillo who is general director and partner of Colombia-based automotive service and consultancy firm SEPA Consultores.

Join Global Fleet in our chat with the executive about fleet management in Colombia, home to Latin America’s fourth largest automobile fleet.

How long has SEPA been around and what did you do before SEPA?

SEPA was established six years ago, but I have only been working full-time on the company for about two years.

Before SEPA, I spent 13 years in the renting business and another six years in public transport services. I am quite familiar with fleet management and have a passion for the business.

Could you tell our readers a bit about what SEPA does?

SEPA is divided into two parts. We are an automotive services company and a consultancy firm.

In terms of service, we represent the company AirLife in routine vehicle maintenance. What we do is purify the air in vehicle ventilation systems through the use of an ionized oxygen generator.

In addition to providing services in more than 70% of the brand name mechanic shops in Colombia, we just started operations in Ecuador in February. We are also planning to start working in Panama in July.

As for our consultancy, we help clients develop rental products in three main areas of focus, being vehicles, machinery, and IT.

I’d like to know more about vehicle renting. How has the business been evolving in Colombia and its surrounding region?

Local companies started providing renting services about 20 years ago. They had very good international standards but did not have strong regional presence.

Now that the market is more mature, international players are arriving in the market. Portfolios are growing and the market is becoming more competitive.

What is the most common type of vehicle fleet management model in Colombia?

First of all, Latin America has two models. One is the American leasing model which is more common in Mexico (open-end) and the other is the European model (closed-end) known as full-service leasing or operational leasing.

We see more of the latter due to the number of Spanish companies in Colombia.

And what about acquisition? Are direct purchases common in Colombia?

About 20 years ago, direct purchases were more common and that was due to the economic situation in the country. As inflation was high, cars appreciated in value so buyers seen direct purchases as a good investment.

When the scenario changed, financial leasing was the trend and that was due to tax advantages for both the customers as well as financial institutions.

Nowadays, these advantages no longer exist and this is why renting is on the rise. Actually, I feel that renting will be the trend for the next 10 years.

Andres Jaramillo is also a member of Global Fleet's LatAm advisory board.