Anuário Brasileiro do Setor de Locação de Veículos | 2020

14 Anuário Brasileiro do Setor de Locação de Veículos Brazilian Vehicle Rental Sector Yearbook 2020 FENALOC Caution and optimism, side by side I t is undeniable that the economy has begun to show positive signals, but caution is required in the vehicle rental sector. We have seen the entry of some automakers into our segment and new business opportunities, such as rental to app drivers and long-term rental for individuals, have emerged. If we look closely at the pillars of the business, we have the following: (1) there is credit for the purchase of fixed assets at low interest rates; (2) the delivery of new vehicles by automakers so far is within normal time frames; and (3) demand is strong as the sector is grows above average. Despite this, the books are not balancing, mainly because of the brutal price war in our sector: we are working with rates up to 30% lower than two years ago, as a result of aggressive discounts. There is also a high rate of default in the public sector, in most municipal and some state governments, hindering cash flow for companies that serve the government. There has also been an increase in the misappropriation of rental vehicles. In our role we need to be aware of these and other issues. This includes bills of law and resolutions by Contran and Denatran, issued constantly, which sometimes surprise us. We are monitoring seven bills of law (all harmful) and continue to try to promote change in traffic fines, so that notifications are forwarded to the drivers and are charged directly to them. Furthermore, we suffer from mechanisms designed to favor certain groups or politicians. The debate about reducing the compulsory insurance rate (DPVAT), which has an indisputable social purpose, exposed that it was not enough to cover the expenses it should. Rental companies cannot transfer additional costs to end customers, thereby further reducing their profit margins. We have other glaring examples: Mercosul plates, which cost R$ 250 a pair (and the old model was no more than R$ 70); and the unjustifiable increase in the fiduciary disposal rate charged by Detrans, which went from R$ 116 (on average) to R$ 350. This make clear the importance of full participation by rental companies in their trade unions and at the ABLA. We at FENALOC are starting to support affiliated associations that today are in a difficult financial situation. In line with the ABLA, we participate in its Management Council and have frank, open and constant dialogue with President, Paulo Miguel Junior, who supports and encourages our initiatives. We also have the support of the National Transportation Confederation (CNT), in which we are part of the Labor Affairs Chamber (CAT) and the Transport and Logistics Infrastructure Section. Finally, the industrial era is ending, and countless companies go through internal crises in the process of digital transformation. This is the time to automate, focus on costs and look for niches that best suit our companies while we have to reinvent our business. It is like changing a tire with the car moving. The next ten to 20 years will be tough, requiring even more dedication and adaptation. e FENALOC is engaged in the search for solutions for all rental companies, especially for small and medium-sized ones, which have suffered the most. We will follow remain an important link for our sector and move forward: we are prepared for the challenges.