linkedin_signin   login  register
linkedin_signin linkedin_signin linkedin_signin    
Home > Regions > South America

Brazil moving from crisis to growth

Since 2013, economic crisis and political instability have taken the shine off Brazil's economy – and car industry. However, despite a major contraction, the Brazilian car market remains hugely significant globally. In 2012, with 3.6 million vehicles sold, it was the world's third-largest automotive market. Last year, with only 2.5 million vehicles sold, it stood at #9 in the global rankings. 
Things did not look up in 2016, with the economy contracting -3% and the automotive industry plagued by overcapacity, overstock and overinvestment. This year might be better, with predictions of a slight recovery, adding 0,6% to GDP. 
More mature
With a True Fleet share approaching 30% of total automotive sales, the Brazilian fleet market is bigger and more mature than all others in Latin America, and close to the European level of maturity. In 2017, the market is estimated to hit 480,000 units. With long-term rental options well understood and attractive to corporations, outright purchase represents only 44% of all corporate vehicle acquisitions. 
Brazil's economic volatility is a major factor in the rise of the fleet and lease sector. Corporates see it as a cost-effective, flexible alternative to ownership, and it is therefore becoming of interest across the corporate sector – also for smaller companies. In Brazil, fleets of up to 10 vehicles constitute the majority of the corporate fleet total, with fleets from 11 to 100 vehicles representing 22%. The principal end-users of fleet and leasing services are the telecom and food and beverage industries. 
Manufacturers have dedicated fleet organisations, segmented for large, medium and small fleets. The current economic crisis may have a deteriorating effect on the quality of the networks and the customer service. 
Quality and complexity
The three main brands last year were Fiat, Chevrolet and Volkswagen, in that order. The strongest riser was Jeep, which shows a market tilting towards SUVs and 4x4s. The Chevrolet Onyx, a subcompact, was last year's best-selling and highest-rising model. Subcompacts or small cars are the most popular segment in Brazil. LCVs comprise 16% of total sales. 
The fleet and lease market is Brazil is characterised by a large degree of fragmentation, with five major companies controlling no more than 25% of the total. Local champions like Localiza are competing on a level with large multinationals like ALD, Arval and LeasePlan. The remaining 75% is spread out over more than 7,000 smaller companies. This adds complexity to the market, and explains the sometimes hugely varying degrees of service quality. 
Image: Edmund Gall, CC BY-SA 2.0
01/03/2017  |  Frank Jacobs

TAGS : Brazil 

Registration required to post a comment Registration required to post a comment

More blogs


In this section, you will read interviews with fleet management suppliers, leasing companies, OEMs and third party providers.

More Interviews

Analysis Analysis

Autorola is helping the fight against corruption in Brazil | 

Members Area Members Area

Privacy statement | General conditions of sale | © 2016 Nexus Communication SA