LOCAMERICA
Locamerica is a company that specializes in customized car rental fleets for business.
Our car rental company has been in the market since 1993. Now we occupy the
second place in the Brazilian ranking for the industry in number of vehicles. It's over
27,000 cars operating throughout the country in a safe, productive and legal way. To
reach that level of excellence, Locamerica distinguishes itself by thinking on unique
and innovative solutions for its fleet and customizing it to meet all our clients' needs.
Currently the company's portfolio includes more than 200 names.
The outsourcing options provided by Locamerica include motorcycles, economy,
executive and armored vehicles, as well as commercial vehicles, trucks and vans.
From the moment the customer chooses a vehicle, it is fitted according to their
requirements. The company's operating fleet averages 14.6 months of age. It
undergoes regular preventive maintenance and we also provide 24 x 7 technical
support by our own call center.
As a matter of course Locamerica spares no effort or investment to achieve its goals.
That is why the forecast for 2011 is that the fleet should exceed 27,000 units: we
expect to buy over 13,000 and sell about 7,500 vehicles. That is why the company will
open new branches, reaching a total of 17 operational units by 2012. These are bold
goals, but Locamerica's team is optimistic because our employees are aware that by
happily caring for our customers and fulfilling commitments with suppliers our growth is
assured.
USED CARS
Locamerica also works in the sale of used cars throughout Brazil. We expect to expand
to other towns by means of our Seminovos Locamerica division. Shortly after the rental
fleet is renewed, Locamerica will take responsibility for making a detailed inspection of
the vehicles so that they get to the end customer in perfect condition. This job is carried
out at our Decommissioning Centers. Currently we have three of those in operation in
the cities of Belo Horizonte, Rio de Janeiro and Sao Paulo. As our cars have high
marketability and guaranteed quality the sale closes the company's business chain
loop.
REVENUE
In 2010 Locamerica held two bond issues, the most recent one being in December.
The two transactions totaled $ 225 million Brazilian Reals (BRL), accounting for 80% of
the amount raised throughout the year. These resources are being used to renew the
fleet and extend our debt profile. Locamerica was also rated as BBB+ in the Fitch
Ratings table, which means a further step in catching the eye of investors and reducing
risk.
Last year $ 291.8 million BRL were invested in purchasing vehicles and the company
plans to increase this figure to $ 400 million BRL this year. Revenue from vehicle fleet
rental last year surpassed $ 200 million BRL, and including the sale of used cars,
Locamerica made $ 100 million BRL. The goal for 2011 is to exceed $ 480 million BRL.
MARKET
Brazil has about 39 million light vehicles today. Of this total, about 2 million are in
company-owned fleets. According to the Brazilian Car Rental Association (Abla), car
rental companies own about 450 thousand cars, 230 thousand of which are
outsourced, which amounts to just 11.5% of the outsourceable fleet in the country. In
recent years, the outsourcing sector has displayed an average growth of 14% per year.
It is estimated that the potential for immediate growth of the fleet rental market should
more than double in a few years, reaching a total of 500,000 vehicles. However, there
are still nearly 1.5 million company-owned vehicles that are not yet part of the target,
but which are nonetheless of great interest to car rental companies.
The Brazilian business community is starting to see the advantages of outsourcing car
fleets. The major one is the reduction in the cost of maintaining their own vehicles, and
paying for automobile taxes, insurance, licensing, etc. And there is also the decrease in
management tasks. By doing that, businesspeople can focus on the most strategic
points of their business and leave fleet management in the hands of people who are
experts in the matter. This new view is already impacting the market, which has been
growing 12% per year. In 2010 Abla estimated that there was a 30% expansion in
sales, which reached $ 5.7 billion BRL.
Large companies in the Brazilian fleet outsourcing market also have great potential for
further development and consolidation. To do this analysis, we must compare the
behavior of the industry in both Brazil and in developed countries. In the US, for
example, 81% of the outsourced fleet is in the hands of the five largest companies in
the market. In Brazil, that figure is only 32%. The remaining 68% are spread throughout
smaller companies. However, the number of car rental companies in the country
dropped 16% between 2003 and 2009. This was mainly due to stricter criteria for
granting credit and the fact that small businesses lack a balance sheet robust enough
to be able to sustain new debts. Thus, already-established companies are more likely
to remain in business and grow even more.
In the used car sector, resumption in market growth based on the quality of products
offered and the ease of credit granting to individuals were the main drives for the
current growth. They also helped attract operators to the sector.
Market indicators:
1
Sales
Car rental growth
2
+12%
1,
4
1,
5
+14%
p.y. 2,
1, 1, 3
9
6
’03
’04
’05 ’06 ’07 ’08 ’09
2,
7
3,
0
Vehicles sold in Brazil
(millions)
3
2,7
204
2,9
3,2
224
250
3,5
284
4,0
319
4,3
363
’0
’0
’0
’0
’0
’0
4 Frota
5 locação
6 Brasil
7 (mil
8 veículos)
9
Fat. locação (R$ B)
Industry consolidation
16%
78
186
149 168
128
114
103
2,3 1,9 1,9 1,9 1,9 1,8 1,9
4
9
6
5
6
1
9
’03 ’04 ’05 ’06 ’07 ’08 ’09
Locadoras
(milhares)
Veíc./locadora
(unidades)
Sources: Denatran; Fenabrave; Economatica; Abla.
HISTORY
Locamerica was established in 1993 by the partners Luis Fernando Porto and Sergio
Resende. It was then called Locarvel. Both already worked in the business of selling
cars, so they had plenty of experience to bring in to the business. Companies in the
construction industry were Locamerica's - then Locarvel - major customers at the
beginning of its operations.
Through acquisitions the former Locarvel grew and started to operate in several
sectors, such as food, telephone, oil and gas, and pharmaceuticals, among others. The
partners always intended to make the company grow and in 2008 - right before the
global economic crisis - the Votorantim Bank joined the business by acquiring 34%
shares and making an investment of $ 110 million BRL. With that contribution
Locamerica had the stamina to survive the turmoil the economy was undergoing and
even to keep growing. The 35% increase in average ticket in the last two years also
helped control costs and maintain the high level of investment with borrowings made.
Development of Locamerica's fleet*
In thousands.
*Fleet profile:
- 69% are economy cars
- 3% executive cars
- 9 % cargo vehicles
- 6% light trucks
- 4 % heavy trucks
- 9% are left to other kinds of vehicles
Development of Locamerica's Revenue*
* In millions
TIMELINE - LOCAMERICA
1996 to 2007
 Foundation
 Acquisition of rental companies in Belo Horizonte
 Opening of the Rio de Janeiro branch
 Acquisition of rental companies in Rio de Janeiro
 Opening of the Sao Paulo branch
 Opening of the Curitiba branch
 Opening of the Vitoria branch
 Opening of the Fortaleza branch
 Opening of the Salvador branch
 Opening of the Cuiaba branch
 Opening of the Porto Alegre branch
 Acquisition of rental companies in Brasilia
2008
 Opening of the Recife branch
 Capital contribution by BV Empreendimentos
 3rd largest vehicle fleet outsourcing company in Brazil
 Implementation of the corporate governance model
2009 to 2010
 Opening of the Campinas branch
 Opening of the Manaus branch
 SAP Implementation
 KPMG Audit
2011
 2nd largest vehicle fleet outsourcing company in Brazil
 Opening of the Ribeirao Preto branch
 Opening of the Locamerica SP Used Car store
 Opening of the Belem branch
PRESS ROOM
If you with for further information, please contact our press agent directly. The contact
info is (31) 3228-1000 - Sandra Barroca. Email: [email protected].