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Full Service Leasing in South America

Full Service Leasing in South America

Tuesday, April 25, 2017

As surprising as it may sound, Full Service Leasing in South America is based upon on its European counterpart. Whether it be in terms of vehicles, clients or services, you will struggle to find the differences. So how has Arval managed to cement its position in this new territory?


Is the South American Full Service Leasing market a carbon copy of the European one? A simple market analysis would suggest that certainly is the case, bar a few subtle differences. The types of vehicles are almost identical in both continents, poles apart from North America. Only Chile and Peru stand out for their professional automobile fleets that are dominated by utility vehicles (small RCVs), as well as some pick-up trucks (smaller than those in the USA). “A characteristic which is mainly due to tax and VAT breaks”, highlights Arnaud Leglaye, Arval’s Regional General Manager. “The leaders operate both long and short-term leasing,” he adds.


Similar services in South America and Europe


Fleet managers resemble those in EMEA, with a similar, growing ‘appetite’ for on-board telematics. Moreover, South America is close to Europe in terms of services and products, and both far removed from the North America model. Customers also sign contracts of roughly the same duration as in Europe, between 36 and 48 months. The one exception? “Mexico is much more influenced by the US model, probably due to its close proximity,” notes Mr Leglaye.


And where does Arval fit in?


A founding member of the Element-Arval Global Alliance, a major strategic alliance between players in the fleet management industry, Arval has continued its international expansion with a new undertaking in South America. In late 2016, RDA Renting, the fleet management specialist based in Argentina and Uruguay, was brought into the fold. The deal sees Arval’s global reach extend to 50 countries in the framework of the alliance. At the end of 2015, Arval signed a joint venture with Empresas Relsa, under the name of ‘Arval Relsa’. “Arval acquired 100% of the Brazilian subsidiary and incorporated it into Arval Brasil. As the industry is slightly less mature in Chile and Peru, the experience of Relsa (40 years in Chile and 10 years in Peru) is a decisive step in the development of Full Service Leasing in these countries,” points out the Regional General Manager.


Cross-business synergy: the common pillar


Galvanised by this growth, the Element-Arval Global Alliance has set its sights on building cross-business synergy between South and North America, as it has done so across the various regions of EMEA. “Our observations are clear: fleet managers on both sides of the Atlantic work on the same principals, giving us the stimulus to develop synergy strategies,” concludes Arnaud Leglaye.