Press Release

Oct 8 , 2021

Volkswagen Financial Services establish new joint venture in Brazil with fleet provider LM FROTAS

Objective is to drive growth in the Brazilian fleet market

Expansion of subscription models for private customers planned

São Paulo/Braunschweig, 8 October 2021. Volkswagen Financial Services have founded a joint venture in Brazil with the fleet and mobility provider LM FROTAS. The aim is to expand the fleet business together so as to establish the new enterprise as one of the top players in the market. Volkswagen Financial Services hold 60 percent of the shares in the new joint venture, while LM FROTAS owns a 40 percent stake. "We see great growth potential in the Brazilian fleet market at the moment and expect the total market volume there to be much higher by 2026. We're looking to harness this momentum. After all, we at Volkswagen Financial Services want to become the world's largest fleet provider," said Jörg Pape, Managing Director of Volkswagen Financial Services in Brazil. He added: "We have found a strong partner in LM, which has more than 40 years of experience and is firmly rooted locally." In addition to their focus on commercial customers, the cooperation partners also plan to expand subscription models for private customers in Brazil. The finalization of the joint venture is subject to approval by the antitrust authorities. The parties have agreed not to disclose the amount of the investment.

Volkswagen Financial Services had already founded the fleet provider "Fleetzil Fleet Solutions" in Brazil in 2017. That company will now be merged with LM under the joint venture, with the result that the new combined enterprise will then have a fleet of around 40,000 vehicles, making it one of the largest provider on the Brazilian market. Pape pointed out: "We see great synergy potential in the merger of the two companies. We benefit from LM's multi-brand capability, its long-standing market expertise, and its very good systems and processes. We, on the other hand, have the advantage of good refinancing options as well as the strategy and expertise of the Volkswagen Group."

The joint venture's portfolio for commercial customers covers the entire vehicle life-cycle and includes the long-term rental of cars and trucks, maintenance services and insurance, as well as complete fleet management.

In the future, private customers will benefit from flexible subscription models, under which the vehicle is made available to them for shorter periods of use. 

LM Frotas and its shareholders were advised by the firms Pinheiro Neto Advogados and BR Finance. Volkswagen Financial Services AG was advised by the law firm CGM Advogados.

Information for editors:

Volkswagen Financial Services are a business division of the Volkswagen AG group of companies and comprise Volkswagen Financial Services AG along with its associated companies, Volkswagen Bank GmbH, Porsche Financial Services, and the financial services companies in the USA and Canada that belong directly or indirectly to Volkswagen AG – with the exception of the financial services of the Scania brand and Porsche Holding Salzburg. The key business fields embrace dealer and customer financing, leasing, the bank and insurance business, fleet management and mobility offers. Volkswagen Financial Services have a total of 16,558 employees worldwide – including 7,472 alone in Germany. Volkswagen Financial Services report total assets of around EUR 225.6 billion, an operating result of EUR 2.8 billion and a portfolio of around 21.9 million current contracts (as at: 31.12.2020).

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