COVID-19: Ready your car rental, leasing contingency plan in Latam
By Daniel Bland - March 24, 2020 (Twitter @DanielBlandBiz)
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The new Coronavirus (COVID-19) pandemic has moved from Asia to Europe and it is now starting to proliferate in the Americas with Latin America trailing behind the United States and Canada.
Just like those before them, countries South of the U.S. border have started to implement nation-wide lockdowns which demand the closure of public areas such as shopping malls, schools, and restaurants as well as federal borders.
As preventative measures entail limiting the movement of people, some impact is expected on the car rental and leasing industry as well as fleet management.
Teleworking from home has also started and the announcement of quarantine periods is becoming common throughout the region, all of which will reduce economic activity for urban mobility and the transportation industry overall.
According to Brazilian car rental association ABLA president Paulo Miguel Junior, it is difficult to measure the overall impact that COVID-19 will have on the rent-a-car industry. It depends on activities such as air transportation, corporate events, business meetings, and leisure travel, all of which have dropped significantly for the time being.
“As for Brazil, there are more than 10,000 car rental companies in the country and 90% of them are small to medium-sized. This means that many are not technologically advanced enough to continue working remotely from homes. Also, remember that rent-a-car is an industry that depends on people,” the executive told Fleet LatAm.
Considering the prediction of government authorities, the car rental sector looks like it will be impacted for at least another 90 days (end of June 2020), he said.
Up north in Mexico, while rent-a-car for the tourism industry has certainly been affected, only a small impact on the leasing industry is being seen, according to Manuel Tamayo who is treasurer of the country’s vehicles leasing association AMAVe.
With 316 cases and two deaths as of Monday (23 March), the Coronavirus impact on Mexico is currently lower than in many other regions in Latin America.
Mr. Tamayo, however, does foresee an upcoming impact on executive fleets but not as much on fleet sales as most international companies continue to operate by teleworking from home. Read more here...