Overview: Argentinian Fleet Market
Argentina continues to be the second-largest fleet market in South America. The top three OEMs are PSA Peugeot-Citroen, General Motors, and Ford. Fleet leasing is not prominent in Argentina; it is more common for corporations to purchase fleet vehicles. The total number of vehicles on the road in Argentina is approximately 13 million, a ratio of vehicles per 1,000 inhabitants higher than Brazil and Mexico.
The fleet management market in Argentina is primarily comprised of rent-a-car companies. The estimated number of cars in the Argentine commercial fleet and rental market is about 80,000 units, with the largest corporate fleet, Telefonica, controlling 3,500 vehicles or over 4 percent of the market.
“In Argentina, due to the cost of capital (above 27 percent/year) and the advantage in terms of income tax benefits of owning a car instead of leasing or renting, makes leasing as a method of acquisition only good for companies in financial difficulties or with no access to cheap money,” explained Ricardo Fonzaghi, VP international sales for LeasePlan Brazil. “Renting in Argentina is something relatively new, and is definitely an alternative to vehicle purchase. Managing a company asset in a country with inflation of 30-percent per year and interest rate of 36-percent per year is very challenging. There are a few good maintenance management companies, which provide services to this new line of business, and corporate fleets can enjoy some tax advantages if compared to purchase or short-term renting companies. There is no perspective of changes in the market for this year as it is believed in Argentina that inflation is good to develop the country in terms of investment.”
Corporations usually purchase their fleet vehicles, rather than leasing. One alternative to the use of company-provided vehicles are taxis, which, for a long time, have been viewed as a substitute product due to their relatively inexpensive cost.
Argentina produces about 800,000 units per year, exporting nearly half.
--By Mike Antich