Could you explain the vehicle transport operation in detail?

For automakers, cost rationalization depends on scheduling and synchronized integration of all stages of the production process. For the automakers to produce with the minimum capital employed, it is necessary to have a minimum inventory formation, synchronizing the supply of parts and equipment with the expected flow of demand for new vehicles.

New vehicles are billed in the CIF mode by almost all automakers. Freight and insurance costs are paid by the automakers and are factored into the final cost of the vehicles for dealerships and final consumers.

From the moment a dealership orders a vehicle lot from the automaker, its delivery should take place immediately so as to meet customer expectations. The speed of delivery and the level of damage to the vehicle are two important factors for the success of sales efforts.

Dealerships maintain small inventories of new vehicles. Thus, a large part of this inventory is stored in the yards of automakers or at Tegma. These are mostly rented (17 out of 21). Within the Tegma yards, it is also necessary to inspect and adapt vehicles before delivering them to rental companies and dealerships.

While some of these resellers or rental companies located in the largest urban centers place orders for larger lots and more regularly, which in some cases allows for direct shipments from automakers,

others, located in smaller cities, do so sporadically and in small lots. Delivery speed is still a competitive attribute of equal importance in all cases. Thus, it becomes necessary to consolidate the vehicles of automakers from the same region at Tegma yards.

Consolidation consists of transporting vehicles of different brands in a given route on the same truck, reducing waiting times and the average cost per vehicle.

Vehicle exports are taken to the ports or by road to Mercosur countries.

The mix of company-hired truck drivers (7%) and outsourced drivers (93%) is due to the strategy aimed at reducing the risks associated with fluctuations in demand for services and capturing the gains resulting from the specialization acquired by truck drivers with respect to certain routes.

Due to the fact that we have more than a thousand truck drivers on the roads in Brazil, since 2007 we have a program called Forte, aimed at training, communicating and preventing accidents with our truck drivers.