Brazil Market Update:

Trends, Threats and Opportunities

International Car Rental Show, Las Vegas, March 27th ,2017

FENALOC – Brazilian Car Rental Federation, is in charge of all legal

& labour issues for the Car Rental Industry in Brazil. Fenaloc is

represented at the National Transportation Board and at the National

Council for Tourism. HQ in Brasília at SAUS qd.1 Bl.J Torre A sl.510

ph.+55 61 3225 6728. We lead the APP Transportation Commision at

NTC and the Congress and have represented the Industry at the U.N.

ABLA – Brazilian Car Rental Association, turning 40 this year. In

charge of all commercial issues, deals with manufacturers and

providers. HQ in São Paulo at Rua Estela 515 Bl.A, cj.51 ph.+5511

5087 4100

Chuí/RS

Monte Caburaí/RR

An overview on Brazil

Population of 203 million

More than 8,5 mi sq.Km

26 States and 1 Fed.District

Portuguese colonization

Strong European immigration

23 Car Manufacturers(and no buy-backs)

Auto Fleet of 49mi(1 per 4 inhab. Approx)

New fleet is 100% Bi-Fuel (ethanol)

Mote than 6,000 car rental companies, most of

them family business(Moms and Paps)

Hosted Fifa´s World Cup and the Olympic Games

Relevant data on economy Interest rate is still VERY HIGH(18% p.a.)

Inflation is going down but still 6% p.a.

Unemployment is 12% and still growing

Taxes on car(sales, industrialized, property and circulation) very high

Big recession and GDP shrink of 3,6% for the 3rd consecutive year(DEPRESSION) – 9%

shrink versus 25% inflation in teh last3 years

Difficulties of financing new fleet and car production shrank from almost 4mi units per year

to 2.8mi( from 4th to 7th global producer)

High risk , bad roads in the countrysinde, expensive insurance and legislation not regulating

competitors

WHY DO SPECIALISTS STILL BET IN BRAZIL???

Some more Figures

Fleet growth and Manufacturers share

Client´s profile

• educated, relative young corporate employees

• 77% male and 62% married

Relevant facts about the global mobility market

Taxi and “technology” companies are fighting for the client ! Both Uber x 99 Taxi received huge investments RECENTLY

Mobility is the new “WORD” for transportation, no matter where.

Integration of mobility via apps is already a reality.

Trafic jams in the big cities give us the will of being driven in the rear

seat.

.

Autonomous cars are not ready in Brazil,but it won´t take long. FCA

is market leader in Brazil and is Google´s partners in this field.

Sharing a driver is currently more popular than Car Sharing

You can get easily fined by cameras in the cities, and parking is

extremelly expensive. There are also restrictions in many areas and

„rodizio“(prohibition of driving in certain days of the week

according to plate´s number / pico y placa)

Fact:Brazilian Market has still a lot to grow

Question Discussion

Do we still have time or will it all be disrupted?

How can we addapt ?

What do we have to change?

How can we improve to survive?

.

Fact: Autonomous and Electric cars

Question Discussion

How was Volvo affected with

recent accident in Arizona?

What is behind? Will O&Ms and

Google blame humans? They

already did!

Cost of electric cars

.

Fact: New generations no longer desires a car

Question Discussion

In a “young country” like Brazil, what should we offer in terms of mobility?

If people buy less cars in the future, will it be easy to finance these cars?

What about the residual value of a good nobody wants to buy?

.

Fact: Financial Market is still betting

Question Discussion

Capital Funds are destroying

instead of employing. What is the

next step?

How can we addapt ?

What do we have to change?

How can we improve to survive?

.

Fact:O&Ms and Uber/Google are together

in autonomous cars projects

Question Discussion

Will manufacturers be the

official transportation

providers?

Will the Government regulate

Uber? They already did!

How can we addapt ?

.

Company Recent moves, M&As and IPOs Estimated fleet

Localiza Purchase Hertz brazilian operation (11,000 cars)

120,000

Movida IPO (for half price) 58,000

Unidas Enterprise ´s stake of 20% and introduction of Alamo & National brands in Brazilian market AND postponed going public

36,000

Locamérica (LT / fleet) Bought Ricci this week (17,000cars) 53,000

Avis/Budget Corporation bought it back 2 years ago – now Corporate

16,000

Thank you for the opportunity!