The Brazil Vehicle Rental Market is projected to grow with a CAGR of more than 6 % during the forecast period.
- Owing to the rich cultural heritage, natural scenic of the amazon forests and beaches with the government initiatives to boost the tourism industry in the country, also the local residents are moving towards renting of vehicles rather than buying a new one, these factors are responsible for the vehicle rental market in Brazil to grow with high CAGR during the forecast period.
- The vehicle rental companies in the country are rising very fast, according to ABLA, number of rental companies rose from 8,033 in 2018 to 10,812 by the end of 2019, and rental fleet reached 997,416 vehicles, an increase of 171,085 units compared to the total fleet registered at the end of 2018 (826,331).
Key Market Trends
Government Initiatives to Boost Tourism
Brazil is one of the top destinations for tourism and the foot fall is increasing every year. In September 2019, the Brazilian Institute of Tourism unveiled a project Brasileiro, traga +5 (“Brazilian, bring another five”), which urges Brazilians living overseas to stimulate tourism in Brazil.
The Government is also relaxing the procedure to obtain the tourist visa for Brazil. After relaxing visa norms for countries like United States, Japan, Canada and Australia, the country has witnessed about 25% in tourists from these countries. In the coming years, the government is working towards adding more countries to the list by easing the visa procedure norms for residents of countries like, China, Qatar, the United Arab Emirates and Saudi Arabia.
Brazil’s Ministry of Tourism said it will invest USD 198 million (813 million in Brazilian real) in tourism efforts through 2020. Efforts include providing 63 small businesses with R86 million in financing and investing R200 million in the first phase of a program that seeks to support small businesses on 30 tourist routes. The government is also relaxing norms for private sector investments in the industry to boost foreign direct investments.
In June 2019, Brazilian Government has established a new policy called the National Policy for Tourism Management of Cultural and Natural World Heritage Sites. The goal of the new law is to help maintain, develop new programs, organize projects and promote the tourist segments related to the Cultural and Natural World Heritage Sites in Brazil. Brazil has 21 recognized UNESCO World Heritage Sites.
Fleet Operators Investing heavily to Gain Market Share
Brazil is the second most favorite destination for tourists in South America. In the year 2018, Brazil recorded around 6.6 million tourist’s arrival. The government efforts to boost tourism in the country and the aim of doubling these numbers by 2022, the private fleet operators are investing heavily in increasing their fleet strength to cater the demand. For instance,
- In October 2019, world’s largest car rental provider, Enterprise Holdings Inc., which owns and operates the Enterprise Rent-A-Car, National Car Rental and Alamo Rent A Car made an announcement that they will start their operation in Brazil.
- In March 2020, Vamos, the vehicle rental firm made an announcement that they will be raising around 1.5 billion reais, through Initial Public Offer and listing on the stock exchange, with an aim to increase the fleet and enhance operations in the country.
- In March 2020, Vai.Car, which is a vehicle rental platform raised USD 85 million. The amount will be used to increase the number of vehicles in its fleet.
The Brazil Vehicle Rental Market is fragmented, with many players accounting for a small market share. Some of the prominent companies in Brazil Vehicle Rental Market are Unidas, Localiza, Movida, Enterprise and others. Owing to the growth in the Brazilian Market many start-ups are coming up in the country and investing heavily to cater the growing demand.
For instance, in November 2019, Kovi, a startup in mobility space, raised USD 30 million in Series A funding from global investors.
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