Volkswagen, Volvo and Scania enter the truck rental business

The supply of trucks for hire has doubled in size this year, following the increase in demand, and has caught the attention of manufacturers. One after the other, they are creating their own companies to compete for this lode. In the last three months, three automakers – Volkswagen, Volvo and Scania – announced divisions to operate in heavy vehicle rental. Randon and Gerdau entered into a partnership with the same purpose, and Mercedes-Benz and Iveco are also evaluating entry into the segment.

Until recently, available only at rental companies, the fleet of trucks for rental rose from 15,800 units in 2021 to 34,100 this year (until September), according to data from the Brazilian Association of Rental Companies (Abla).

The automakers have not yet disclosed how many vehicles will be offered for lease, and none wanted to do a price comparison simulation, claiming that there are many variables that need to be taken into account in the calculation. They will compete in the market with specialized companies such as Vamos, Localiza and Ouro Verde.

Following the same trend of automobiles, in which consumers see advantages in renting a vehicle instead of owning it, large fleet owners are beginning to understand that it is better to focus on product distribution and leave the fleet management to third parties. The leasing of trucks is already a big business in European countries “and it should grow a lot in Brazil in the coming years”, evaluates Paulo Miguel Junior, managing counselor of Abla.

According to the president of Volkswagen Caminhões e Ônibus (VWCO), Roberto Cortes, with the pandemic, many companies found it difficult to obtain credit for the purchase of trucks and are opting for rent. In August, the group launched VW Truck Rental, a service in partnership with the brand’s bank – Volkswagen Financial Services -, becoming the first automaker to enter this business in the country.

Services included

VWCO offers contracts from 30 to 60 months that include, among other items, services for the management of preventive or corrective maintenance at the brand’s resellers, insurance, telemetry system, fine management, documentation, payment of IPVA and bodywork.

Miguel Junior believes that the entry of automakers into the rental business will help this market to grow even more. He points out that one of the advantages of the manufacturers in relation to the rental companies will be precisely the offer of services, especially maintenance, in the brands’ own resellers. Rental companies also offer this service, but not necessarily done by authorized resellers.

Locadora Volvo, a division created last month, will operate in the leasing of trucks, buses and construction equipment, with terms ranging from 24 to 60 months. The company’s entry into the industry, according to José Olimpio Francisco, market development director at Volvo Financial Services, aims to meet a new demand. “We see a trend towards leasing goods in cargo transport and logistics in the industry, agribusiness, mining, construction and forestry sectors”, says Francisco.

According to him, data from Renavam show that, in 2018, truck license plates for rental companies represented less than 3% of the total number of vehicles delivered. Already this year, the volume accumulated until August reaches 11%. In more mature markets, such as the US and Europe, the share can vary from 15% to 25% of the total trucks entering circulation.

According to him, one of the advantages is to make the lease according to the seasonality of the companies’ operations or to supply specific projects, using new vehicles that will be returned at the end of the contract. Another benefit, in Volvo’s view, is that there is no need to invest in assets. The lessee assumes the monthly installments and can allocate the payments as an expense on their balance sheet.

most expensive trucks

The move takes place at a time when there is a change in the rules for emissions and consumption in heavy vehicles, recalls Flávia Spadafora, responsible for the automotive area at KPMG consultancy. Starting in January, new vehicles will have to meet stricter targets, which required the adoption of new technologies that will raise prices between 15% and 20%.

Published by KPMG, SAE Brasil (which brings together automotive engineers) and the publisher Autodata, a recent survey shows that 45% of potential truck buyers say they see leasing as an alternative.

Among the advantages considered most important by respondents to the survey, 33% cited greater cash flow and capital available for other investments; 23.1%, maintenance management, documentation and fines; 19.8%, not being concerned with demobilization and sale of assets; 15.7%, tax and tax benefits; and 7.4%, other factors.

Last week, it was Scania’s turn to announce the creation of Scania Locação, which will start operations in January and will be managed by the manufacturer itself. In addition to Euro 6 trucks, the rental fleet will have vehicles powered by natural gas and/or biomethane.

Silvio Munhoz, General Director of Commercial Operations at Scania, says that the lease will not replace sales of new ones, but expand the brand’s operating profile. “We began to notice a trend towards acceptance of truck rental, changing a little the conservative profile of Brazilian transport”, says Munhoz.

Also with contracts from 24 to 60 months, the lease will include a package of connectivity and monitoring services, maintenance programs and 24-hour technical assistance.

In preparation

Randon, a manufacturer of trailers, brakes and suspensions, and Gerdau created a joint venture in September to enter the truck and equipment rental segment. The new company, still unnamed, will receive investments of R$ 250 million until 2024.

The vice president of sales and marketing at Mercedes-Benz, Roberto Leoncini, says he is discussing with the retailer’s network and the brand’s bank when and how the group will be able to enter the lease. In his opinion, the models being launched “are unattractive”.

Another manufacturer that will offer rental service, but has not yet set a date, is Iveco.