36 HISTORY In the 1970s, there was demand and potential market for fleet outsourcing services in the Northeast of Brazil, especially in Salvador (Bahia state). The development of this important business segment for vehicle rental and leasing companies would have been perfect at the time were it not for certain difficulties which since then have impacted companies that had an interest in entering that market. Luiz Mendonça Filho, founder of LM and a former member of the National Council at ABLA, says that precisely because it was a new and completely unknown service in Bahia (and throughout the Northeast), the challenge was to find skilled labor and raise the credit necessary. “The banks were very cautious about this new type of business,” he recalls. “Any negotiation about credit was very exhausting, even more so than today, requiring enormous efforts by companies in our sector,” he adds. Rental and leasing companies that decided to face these challenges instead of retreating turned these difficulties into reasons to learn more and improve the quality of their services. The path followed was benchmarking - a process in which a company learns about best practices for similar functions from others in its own market segment). As fleet outsourcing clients were already very demanding, the rental and leasing companies that managed to win them over were the ones that first of all knew how to monitor and assimilate practices used by large companies in the sector. “I myself learned a lot from them and allied this knowledge to my natural instinct to serve clients more efficiently,” says Luiz Mendonça Filho. “Only companies that also developed this expertise and tried their best to satisfy clients and win their trust in relation to the service provided gained market share,” he goes on. Furthermore, knowing how to observe is another important characteristic of successful entrepreneurs who are operating in the sector now. This is about picking up tips, listening to criticism and analyzing what clients do. “After that, you can expand the business and improve service delivery,” says the businessman from Bahia. As an example, he says that in the 1970s it was usual in the Northeast for people who needed a car for a day or more to offer taxi drivers a daily rate. This is among the reasons some entrepreneurs in the region got into the rental sector. “There was no developed rental market, but we saw there were business opportunities,” says Mendonça Filho. “And that came about from observing people’s use of taxis,” he adds. Vehicle rental and leasing companies in Bahia and throughout the Northeast had to improve and innovate quickly, driving the development of fleet outsourcing and the sector as a whole in the region. “We had to improve methods, cut red tape and speed up procedures to optimize the provision of outsourcing services,” Mendonça Filho says. “Specifically in Bahia, this increased professionalism was boosted after the Camaçari Petrochemical Complex was opened,” he says. From then on, the state and the vehicle rental and leasing sector began to change, as large clients needed to outsource their fleets. “The experience with companies in the Petrochemical Complex was one of the main factors that really gave the sector a definitive push in the region,” says the former ABLA councilor. Thus, many of the rental and leasing companies in the Northeast, and especially in Bahia, started to dream bigger and to compete as major operators, providing the quality needed to the multinational companies in the region. “There were multinationals that at that time had global agreements with international car rental and leasing companies,” recalls Mendonça Filho. “We started to make inroads by demonstrating that local companies could provide them with high quality services at a price within the reality of the Brazilian market,” he says. Back in the present, based on 38 years in the vehicle rental and leasing business, Luiz Mendonça Filho says that fleet outsourcing in Brazil is still very small. “Outsourced corporate fleets in Brazil account for about 5% to 8% of the market, while in Europe and the United States it is 50%,” he says. Nevertheless, he is optimistic about 2015. “Our expectation is that the sector will continue to grow with the expansion of business into new regions based on the companies’ sales and marketing efforts,” he says. As you can see, where many only see problems, Luiz Mendonça Filho can still see good opportunities. Fleet outsourcing in the Northeast of Brazil The challenges of the past were very similar to those in the present day, especially in relation to skilled labor and problems getting loans
RkJQdWJsaXNoZXIy NDU0Njk=