1 sep 20

Latam automotive fleet industry pushes forward amidst adversities

Despite the health and economic adversities seen in Latin America this year, there does seem to be some light in the automobile industry, especially when it comes to fleet. Yes, it is faint for now, but this is certainly something worth looking forward to.

While countries throughout the region are expected to lose 30% or more in automobile sales in 2020, many of the big players are bouncing back with flexibilty and creativity and fleet management portfolios are actually expected to be up for the year, according to Global Fleet estimates.

To support the market, practically all automakers in the region have opened-up virtual showrooms to serve would-be-buyers in the comfort of their own homes or offices, offering access through social networks and mobile apps such as Facebook and Whatsapp as well as their websites.

Much of this online (non-face-to-face) transition has occurred in the largest markets of Brazil, Mexico, Argentina, Colombia, Chile, and Peru, among the best-selling fleet brands being Chevrolet, Volkswagen, Fiat, Ford, Toyota, Nissan, Renault, Hyundai, Jeep, and Audi.

Nissan gears up

More recently, Nissan motors announced this month (August) new investments of US$130 million for its production facilities in the Santa Isabel industrial complex in Córdoba province Argentina. Adding to its US$600 million investment announced in 2015, it is aimed at increasing production of its Frontier pickup.

2020 Nissan Frontier (source: Nissan)

For the fleet market, pickups are quite popular in Argentina. Among the competitors Nissan faces in the country are Toyota Hilux, Ford Ranger, and Volkswagen Amarok. 

Meanwhile, in Latin America’s largest automobile market where fleet is dominated by General Motors, Volkswagen, and Fiat, Nissan Brazil president Marco Silva highlighted the company’s plan to expand in northern Brazil during an online meeting earlier this month with journalist.

Mainly aimed at marketing the Frontier and the subcompact SUV Kicks, among the states of focus are Amazonas, Pará, Amapá, and Rondônia, all of which saw their sales increases outpace the national average in 2019.

Eying Brazil 

Regarding Brazil’s economy as a whole, emergency measures taken by the Ministry of Economy and the Central Bank to boost corporate credit and increase liquidity in the financial system has put the country in a better situation than most other emerging markets, according to the Central Bank.

From a GDP perspective, the 5.6% recession estimate in Brazil should be better than most emerging markets in 2020, second only to India and significantly less than Mexico and Argentina which could face recessions of some 9% in 2020.

In a July sales report, the SUV market in Brazil dominated, representing 38.3% of national sales, followed by compact hatchbacks (26.8%) and subcompact entry level cars (11.5%). Leading SUV sales were Volkswagen T-Cross, Chevrolet Tracker, and Jeep Renegade, all common benefit cars for the fleet market.

2020 Volkswagen T-Cross (source: Volkswagen)

USA influence

Finally, in addition to the North America USMCA agreement aimed at stimulating automobile industry business in Mexico as well as the United States and Canada, the US government’s “Return to the Americas” program is increasing ties between the United States and Colombia.

Talks between the two governments started in August, some of which could entail repatriating automobile industry business from Asia to Colombia. In 2019, commercial vehicle fleet sales in Colombia rose by some 10%. The country is also among the most progressive when it comes to electrified vehicles in Latin America. 

For more on the latest on fleet management and mobility in Latin America, register for the Fleet LatAm “virtual” Conference 2020 schedule to take place on 29-30 September. Join in on round table discussions, workshops, training sessions, and more.

Authored by: Daniel Bland