What about Colombia?

During 2016 and early 2017, I did an deep analysis of the fleet market in Colombia and had opportunity to know an extraordinary country, I meet a lot of engaged people and companies that’s are open to new ideas and possibilities. A land of good opportunities, with a very promising market for several sectors, including car fleets.

Recently, Global Fleet (important European organization specialized on Fleet around the world) made some publications about the Colombian fleet market, and mentioned that the country "has an important productive vehicle park". Among them, I would like to highlight the presence of Renault and GM for light vehicles, which divide the market leadership.

However, I can’t avoid to comment on Nissan's strong presence with the pick-ups, as well as other brands such as Volkswagen and Ford, which have a well-organized and structured network of importers and service providers.

Colombia is the fifth largest country in Latin America, and oil’s industry is one of the most important in the Colombian economy. Beyond it, agriculture, gold and precious stones play an important role in the economy. Add to that, Colombia is becoming the third largest provider of IT services in Latin America with more than 5,400 companies and record sales in 2015 close to $2.5 billion.

Compared with other Latin American countries, Colombia has a considerable stable economy, but it is also suffering like other countries in the region. Despite this, Colombia Government has taken positive actions to control inflation and public expenses, and have had positive effects last years.

One example was the rise in interest rates in 2016, which was aimed to control the inflation. In June 2016, interest rates reached 7.5%. Today, returned to 5.5% - same level as in previous years.

This brought inflation into the government's target, and, in June this year, it reached 3.99%, after reached 5.3% in the same period of the previous year.

Colombia is an "uncomplicated" country. It is ranked # 53 in the Doing Business Index, and has strong financial institutions and stable economic indicators, which brings goods possibilities for developments.

And why does Colombia become a good business opportunity in the fleet sector? Add to some others indicators, Colombia also presents a large number of national and international companies, and continue growing, especially after the agreement between the government and FARCS and which have attracted important foreign companies.

Today, most of these companies have "own fleet". It is estimated that less than 1% of the company’s fleet are outsourced, and these numbers have been improving a lot in the past two years.

Studies show that these companies have a strong trend assuming new methodologies for their fleets. As in Brazil, the development of the outsourcing sector follows the same evolutionary trend, that is, companies allocating resources in their businesses and using outsourcing as an alternative to maximize the financial operational costs and efficiencies.

Not avoiding mentioned the excellent opportunity of other models such as "private leasing", which therefore increase the potential for the sector in the country.

To do so, some segments still need attention and development. One of this is the implementation of a fleet culture for the supplier market, seeking greater efficiency and quality of services. The second is the used car market, still need improvement and, as we know, have a strong influence on the TCO (Total Cost of Ownership) of the vehicles.

These factors are not impediments, on the other way, acting on these, will be an important factor to speed the growth and will represent the success of the companies that are there.

With all the economic crisis around the world, fleet sector presents excellent development opportunities, especially in countries like Colombia, which is open to modernization and new business models.

Cleber Kouyomdjian is economist, graduated from the Universidade Paulista and has been working for more than 17 years in the financial services industry, in leaders multinational companies like LeasePlan, Arval, Hertz and Relsa. Cleber built his career acting in Operations, Sales and General Manager positions. He has extensive international experience, being knowledgeable of the best practices of the sector in Europe, USA and Latin America. He is advisor member of Instituto PARAR, an organization that has some objectives like professionals capacitation in the fleet segment, also aims, in addition to other purposes, to contribute to the reduction of car accidents in Brazil, which kills more than 50,000 people a year.