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Security and Mobility: Two challenges for Latin American fleets

In a recent publication distributed at the Global Fleet Conference 2017 event in Miami, I was introducing some specificities of fleet management in Latin America region.

 

  1. The relative immaturity of the market as fleet management represents a modest part of car registrations (from 5 to 20% maximum in Brazil)
  2. The variety of products on offer with an open end product (US-wise in Mexico) and mainly a closed end product in the rest of the continent.
  3. The scarcity of a regional approach from both suppliers and fleet managers.

 

However this situation does not mean that the innovation process and challenges to face will be addressed in a longer term than in Europe or in the USA.  It may even be argued that new technologies could help in resolving urgent requirements and be applied to rectifying the mobility chaos in big cities. Some presentations in Miami were suggesting that Latin America and emerging markets would be the most important playgrounds for connected cars and drones as they will offer solutions to the difficulties encountered in the areas of security and mobility.

 

Among the problems to be faced, the recent round table on Latin America held in the Global Fleet Conference in Miami last June put a focus on security and mobility.

 

Security is a challenging topic. The majority of drivers are not insured, as it is not part of the culture in the continent. An accident is frequently a dramatic event in economic terms for non-insured drivers.  For this reason, the police and insurance companies (when one of the drivers is insured) need to go to where the accident took place and the cars remain blocked in the middle of the road for hours until officials are able to make their reports. The police generally confiscate drivers’ licenses and could even arrest a driver if there are severe casualties. Generally speaking, accident management is a very cumbersome and lengthy process. And fleet managers have to look carefully into the protection that they provide to their employees. Insurance costs (casco) tend to be very high because of theft and some models may be particularly expensive as they are targets for delinquent networks providing spare parts to non-official garages (in particular those models that are fashionable among taxis). It is obvious that telematics will help locating cars and fighting against theft. Drones will also be used at some point to take pictures of accidents to provide proof and reduce waiting times.

 

Security is a concern for fleet management in general and insurance companies are still not used to working with professional fleets. While talking about security, a word on armoured cars for top management. Most international companies require armoured cars for their top executives to protect them against armed attack and kidnapping. Is this true protection (or the opposite) and which cars should be selected?  This is a good question for a future debate on security where connected cars may offer an alternative and/or complementary solution.

 

Mobility is even more challenging. Traffic is very bad in most capitals and major cities on the continent.  Most fleet managers are concerned with company cars but all employees have enormous difficulties to commute every day from home to work as public transportation relies on bus companies (mainly private ones) and collective taxis. Trains and tubes represent a limited network. In Mexico and Sao Paulo, the largest metropolitan areas of the continent, employees living in popular suburbs could spend 8 hours a day (4 in the morning and 4 in the evening)  commuting.  HR departments are concerned and solutions need to be looked at not just for company cars, but globally.

 

Car sharing (as a technological alternative to collective taxis) could certainly ease transport problems and reduce the number of company cars in countries where they are more or less limited to top executives (perk car), sales and distribution for economic reasons.

 

In most Latin American capitals, pollution is a major issue because of the concentration of people, the age of the cars and the buses and the geography (Mexico DF for instance is located at 2000 metres of altitude, inside the mountain range). Local authorities are banning all cars from driving except hybrids and EV’s. As a consequence, in the worst-case scenario, a car may only be allowed to drive for three days a week in Mexico DF. This situation will certainly impact company car policies and we can imagine a progressive switch toward alternative powertrains and, or, multimodal solutions. A combination of taxi subscriptions (an Uber-like model), short-term renting and company buses for instance if cars become progressively useless as they are not allowed to drive in the city or are impossible to park (which is another constraint). It will take some time as payment systems are required to make it manageable and controllable but this is already the case with Uber and daily rental. Technology will be necessary to connect these applications and integrate them with accounting and treasury.

 

 

Latin America will certainly not wait for the transfer of new products emerging in Europe and the US. New technologies (connected cars and drones) will be adapted to offer mobility solutions and security as called for by the situation.  Insurance companies, Rentacar, hailing platforms and leasing companies will have to compete or partner to make the cities better places to live in.

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CV Bloggers

Pascal Serres
Nexus Communication - Global Fleet Expert

Pascal Serres began his career in 1976 as a consultant in macro-economics in emerging markets and joined Societe Generale in 1988. He worked for the bank in the UK and Italy and joined ALD International in 2002. For a decade and a half, Pascal Serres was one of ALD Automotive's top executives. As Deputy CEO (since 2008), he was instrumental in the company's expansion into Latin America. For his contributions to the fleet and lease industry, Pascal was inducted into the International Fleet Hall of Fame at the 2013 Fleet Europe Awards in Prague. Since 2017, Pascal Serres, who has over 15 years' experience in international fleet and mobility management and car leasing, will offer his advice via MOBY-D, his new consultancy firm focusing on integrated and innovative mobility. He has also joined Nexus Communication, the publisher of Fleet Europe, Global Fleet and Smart Mobility to provide expertise and insight to these three Fleet and Mobility business platforms for international decision makers.Steven Schoefs blog will focus on key trends and developments within the European fleet market and the automotive market, as well as on the evolving role of the international fleet manager.

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