Localiza is a car rental company operating in various segments of this sub-niche. In this sense, it operates in a varied manner, with the acquisition, rental, and sale of used cars, not to mention fleet management and outsourcing. In summary, Localiza has 4 divisions that work together in its business.
The Company has certain characteristics that ensure important competitive advantages in its market:
Integrated business platform: increases synergy among its 4 pillars
National presence: offers extensive service coverage throughout Brazil
Differential relationship with manufacturers: favors one of its sales branches
Technology and information: strong implementation of technological resources in its services
Globally recognized brand: helps build trust and solidity with suppliers and customers
Business Lines
Localiza Hertz
Localiza Hertz is the company's branch that works with car rentals commonly referred to as Rent A Car (RAC). In this context, the rental offered occurs both for individuals and for companies. In the rental segment, the total fleet available is nearly 500,000 vehicles, which corresponds to about 50% of the total national car rental market.
For this to become possible, Localiza Hertz established around 100 agencies located at airports, which contribute nearly one-third of its revenue from car rentals. In contrast, it has over 430 agencies outside airports, spread across more than 350 cities in Brazil. Based on these numbers, we have Localiza as the largest car rental network in South America in terms of the number of agencies.
Localiza Fleet
Localiza also works in fleet management and outsourcing for companies and other entities. In simplified terms, the operating model consists of providing vehicle fleets for corporate use to other companies. Contracts of this type have an average duration of 2 to 3 years, generating recurring revenue for the company.
Fleet management is synonymous with low capital investment needs, which keeps the fleets with a relatively low fixed cost consequently. More than that, Localiza Fleet has a fleet of vehicles with various models, colors, and brands, all to offer a personalized solution according to each client's needs.
Another interesting point is that this sector of the company operates with a focus on the constant broad implementation of technology. From this perspective, the company provides a fully connected fleet, and thus, it can, for example, provide customized fleet monitoring reports. All of this is possible because the company has the startup Mobi7, which created an internal laboratory for developing telematics solutions and technological innovations.
In summary, it offers easy and intuitive applications that connect users to the fleet manager, allowing clients to resolve potential issues and have a pleasant experience in the process.
Localiza Franchising
The franchising segment has the fundamental objective of expanding Localiza's business in various areas of the country, increasing the value and representativeness of the brand. With around 100 agencies in Brazil and 80 abroad, the franchise model increases the brand's reach, generating value for itself and its franchisees.
Localiza Seminovos
Localiza Seminovos operates with the sale of used vehicles after their use in operations such as car rentals. This category is of extreme importance. Localiza's operation in this market occurs through the deactivation of used cars that were previously rented and at a later moment the commercialization of these, mostly, directly to end consumers through its own network of stores. In this way, it maximizes the recovery value of these assets and reduces the depreciation of the cars and the net investment for fleet renewal, since the sales expense of the own store network is lower than the discount required by resellers.
Localiza Seminovos has good accuracy in estimating vehicle prices and thus generates greater customer loyalty and excellent repurchase rates. Its operation is extensive, and the more than 124 stores are distributed across more than 85 cities in Brazil. Additionally, it also has an online sales channel to boost its business. The model is further optimized by tax exemption contracts, keeping the company ahead in terms of price compared to other companies.
The history of Localiza takes us back to 1973, when the company began its car rental activities with just 6 used and financed Beetles in downtown Belo Horizonte-MG.
Incredibly, by the end of the 1970s, Localiza was already expanding rapidly, reaching the capitals of Vitória, Rio de Janeiro, Salvador, São Luiz, and Fortaleza, unlike its competitors who concentrated operations mainly in the southeast.
By 1981, it already had operations in 11 Brazilian capitals, taking the lead in this Brazilian market and achieving, the following year, the incredible mark of 1000 cars available for rent.
In 1984, the Company took a step forward in its national expansion and created the franchise model through Localiza Franchising. Shortly thereafter, in 1991, it began operations for selling used cars to renew the fleet through Localiza Seminovos, something that would become a fundamental piece of its business. Still in the 1990s, the founding partners sold one-third of the Company's capital to DLJ Merchant Banking and thus began to access the international capital market. In the same year, it established Total Fleet, which would be responsible for fleet management and outsourcing businesses.
The first step towards going public on the Brazilian stock exchange occurred in 2005, after registering as a publicly traded company with the CVM. In the same year, DLJ sold its entire stake in Localiza, and thus, on May 23, 2005, it conducted its initial public offering, offering more than 21 million shares.
More than 10 years later, in 2017, Localiza formed a strategic partnership with the American company Hertz, taking over all Hertz car rental operations in Brazil. As a result of the success of its operations and national expansion, in 2018 the company surpassed the mark of 220,000 cars distributed across more than 580 agencies in over 6 countries in South America. According to data from the Brazilian Association of Car Rental Companies, Localiza is the leader in the Brazilian car rental market, demonstrating all the excellence built over more than 45 years of history.
