Brazil’s top car rental companies say a cultural shift toward sharing automobiles rather than owning them is likely to bolster demand as growth quickens in Latin America’s largest economy.
The three main providers of rental cars in Brazil have far outpaced the Ibovespa stock index’s 11 percent advance this year. Cia de Locacao das Americas is up 85 percent, Localiza Rent a Car SA has surged 31 percent and Movida Participacoes SA has grown 19 percent.
None of the three have drawn any sell recommendations from analysts, who see them rising between 5 percent and 22 percent over the next 12 months, data compiled by Bloomberg showed.
Banco BTG Pactual SA, for example, expects strong growth to persist for longer as corporate demand recovers and Brazilians turn to rentals.
As a pro-business government prepares to take over in Brazil on Tuesday, consumer confidence has seen a rebound and economic growth is expected to accelerate. Car rental companies, which depend almost entirely on the domestic economy, are expected to benefit from the improved scenario, as well as from increased demand from ride-hailing services such as Uber Technologies Inc.
Brokerage Nau Securities said it estimates that as many as 20 percent of Unidas SA rentals and 10 percent of Localiza’s are to ride-sharing drivers.
Brazil is one of Uber’s biggest global markets.
The behavioral shift would result in “significant growth” over the next few years, with more of Brazil’s 50 million cars staying with rental companies as consumers shift toward ride hailing and renting cars, instead of owning them, Movida chief executive officer Renato Franklin said.
The companies are each picking their markets — in Movida’s case, young drivers and online rentals, for example — which should help growth as well, Franklin said.
The top three players accounted for 54 percent of the market by gross revenue last year. In 10 years, they might reach a combined market share of about 66 percent, Bradesco BBI analyst Victor Mizusaki said.
Unidas — the result of a merger earlier this year between the company and Locamerica — now sees more rational competition and expects strong demand through the end of next year, chief executive officer Luis Fernando Porto said.
The firm should expand its headcount by as much as 15 percent from its current 2,300 employees, Porto said.
Competition is “forcing the companies to get better,” Localiza cofounder and chief executive officer Eugenio Mattar said. “If you don’t improve, someone will do that and take your client.”
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks