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Founded by Salim Matar Jr. during the oil crisis, company overcame challenges, innovated, and became the largest rental company in Latin America.
Localiza, founded by Salim Matar Jr, started with just six used and financed Beetles. Ignoring advice not to venture during the oil crisis in the 70s. Today, it has a fleet of over 669 thousand vehicles. It is the largest car rental network in Latin America.
In 2024, it generated over R$ 37 billion and is present in seven countries. The story of Localiza began with the vision of José Salim Matar Júnior. He transformed a small idea into an empire, overcoming various economic crises along the way.
The Origin of Salim Matar Jr. and the Idea of Localiza
José Salim Matar Jr inherited the entrepreneurial spirit of his Lebanese merchant family. His grandfather, Salim Alfredo Matar, came to Brazil fleeing religious persecution and started as a peddler in Minas Gerais. Salim Jr. was born in Oliveira (MG) in 1948. He lost his father at 13, but kept alive the dream of having his own business. At 17, he moved to Belo Horizonte. Working as an office boy, he saw an invoice for a car rental from the company Volkscar. That sparked the idea that would change his life. He studied Business Administration and realized the potential of the car rental market in Brazil. He gained managerial experience at the mining company Encal.
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Amid the oil crisis of 1973, he decided to found Localiza. He ignored contrary advice, believing that crises are temporary. He found a partner, Antônio Cláudio Brandão Rezende. They started practically from scratch, without capital. The first fleet: six used Beetles, purchased on credit in May 1973.
Accelerated Growth and Financial Risk
In the beginning, partners Salim Matar Jr and Antônio Rezende did everything. They drove, repaired, and washed the cars. They slept in the office to ensure 24-hour service. Soon, their brothers, Eugênio Passeli Matar and Flávio Brandão Rezende, joined the business. Leadership was divided between two engineers and two administrators.
By 1978, Localiza was already the market leader in Minas Gerais. But rapid growth required a lot of capital. The company operated at the financial limit. Even so, it expanded outside MG in 1978, acquiring a rental company in Vitória (ES). The model worked, and they bought another 11 rental companies in cities like Curitiba, São Paulo, and Salvador. The company remained highly leveraged financially.
Franchising, Semi-New Vehicles, and External Capital
The external debt crisis in 1983 put Localiza in difficulty. With scarce capital, the company adopted the strategy of franchising its operations. It began opening franchises in small cities throughout Brazil. This move helped the company survive. In 1991, another important step was the creation of the Semi-New Localiza division. They began directly selling the used cars from the rental fleet.
In 1996, the company recorded its first annual loss, affected by the crisis in Mexico. To ensure continuity, it needed an investor. In 1997, they sold 33.33% of the company to the foreign investment fund DLJ Merchant Banking. The injection of around US$ 50 million gave the company breathing room. In the same year, Localiza raised another US$ 100 million in the international market, just before the Asian crisis.
IPO, Fleet Management, and the Agreement with Hertz
With capital, Localiza created the Fleet Management division. It began offering rental, management, and outsourcing services for companies. In 2005, it went public on the B3 stock exchange. It raised R$ 184 million in the IPO, used to renew and expand the fleet.
In 2016, it made an important strategic move. It acquired Hertz’s Brazilian operation for R$ 337 million. The agreement included the use of the Hertz brand in Brazil for 20 years (renewable). The partnership aimed at international tourism but was terminated in 2020 after Hertz’s bankruptcy in the USA.
The Winning Business Model of Salim Matar Jr and Its Current Challenges
The success of Localiza is based on a strategic cycle. First, it purchases new cars in large volumes, with discounts of 15% to 30% from manufacturers and tax benefits. Second, it rents these vehicles for 12 to 24 months. Third, it sells the used cars through the Semi-Used Localiza. This semi-used division is now a fundamental pillar of the company’s revenue (more than half of the total).
However, the model faces challenges. There are regulatory debates about the payment of ICMS on the sale of semi-used vehicles. The STF decided in 2020 that the tax must be charged if the sale occurs within a year of purchase. There are discussions to extend this period to two years. The pandemic also impacted the depreciation of the fleet purchased in the years 2021 and 2022, when prices were high due to a lack of components. The rise of electric cars and the entry of Chinese brands are transforming the automotive sector. Localiza needs to adapt its strategy to these new realities.
Localiza Today
Currently, Localiza&Co is the largest mobility network in South America. It operates in seven countries. Its fleet exceeds 669 thousand vehicles. It has 948 physical points and employs 22 thousand people. In 2024, net revenue was R$ 37.2 billion. Consolidated net income reached R$ 1.8 billion. Despite regulatory and market challenges, the company has a history of resilience and innovation. It has the tools to continue growing and adapting to the future of mobility.
Boa noite
Frequentemente a empresa onde trabalho pega carro na localiza somos muito bem atendidos ,os carros em ótimo estado e sempre muito limpos caros completos e agora admiro ainda mais a empresa pela história de superação.
Morador de Aparecida de Goiânia
Pois é.
Uma empresa neste porte, com comportamento de boqueta de fundo de quintal.
Às vezes, o crescimento esplêndido não significa que foi justo e honesto.
Parabéns pelo artigo. Muito bem elaborado e fundamentado. A observação que faço é sobre a empresa objeto nesta matéria.