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Group History Localiza

LOCALIZA was founded in 1973, by the time of the first oil crisis, with six used Volkswagen beetles bought on credit. The strategy adopted ever since was of total quality and premium service. During the second oil crisis, the company decided to expand and did so by adopting an aggressive strategy of buying-out its competitors. Acquisitions took place in 11 capitals, mainly in the Northeast or Brazil.

When Brazilian external debt generated a serious crisis in 1983, capital was scarce and costs high. LOCALIZA then adopted the franchising strategy, opening locations in country cities and strengthening its brand. The company substantially widened its presence within the Brazilian market and leveraged sales higher than expected.

Depreciation is the most important cost component for a car rental company. In 1990, with the aftermath of the crisis generated by the Plano Collor [President Collor’s Plan], the used car market plunged. Until then, LOCALIZA had been selling its cars at auctions and through trade-ins with car dealerships. This was a handicap that negatively impacted the company’s results and its ability to compete.

Thus, from 1991 on LOCALIZA decided to adopt a strategy of selling its pre-owned cars directly to final consumers.

In 1992, when Brazilian GDP was negative (-0.54), Localiza adopted the strategy of its internationalizing its operations. It was a way to make up for the difficulties found in the internal market and move for an international expansion, thus validating its know-how.

The car rental and fleet administration are intensive capital businesses and therefore demand extensive resources for their growth.

In 1997, Localiza adopted a capitalization strategy and performed a private equity operation with DLJ Merchant Banking (Donaldson, Lufkin and Jenrette), in which this fund, which was operated by the American bank (today Credit Suisse First Boston), acquired 33.3% of LOCALIZA’s stock for US$ 50 million.

Still in 1997, Localiza adopted a new capitalization strategy and debt substitution by launching US$ 100 million in Senior Notes in the American Market. This strengthened the company and made it more competitive. With this new capital, the company increased business and improved productivity.

In 1998, LOCALIZA converted its fleet rental division into a separate company, named TOTAL FLEET, a pioneer in this segment in Brazil. Today, TOTAL FLEET holds a fleet of more than 22,667 cars, and with sophisticated management and fleet control system supplies large companies with their rental needs.

In 2005, the company began offering public stock at the New Bovespa Stock Exchange.

Localiza operates an absolutely synergy-driven businesses platform that includes.

Localiza Rent a Car S/A--------------------------------------------------------------------------------Car Rentals
Localiza Franchising S/A------------------------------------------------------------------------------- Franchising
Total Fleet S/A-----------------------------------------------------------------------------------------Fleet Rentals

Localiza’s management is highly regarded in the market and rakes its talents through aggressive human resource policies. It was one of the first Brazilian companies to share profits with its employees. Also, since 1990, it adopts a remuneration system consisting of a fixed part and another that varies according to the performances of the area, the company and the employee.

The company invested in a sophisticated information system that has become an outstanding business management tool. Such tool, together with cutting edge hardware and tailor-made software, has proved to be a great competitive edge in the market.

A very particular trait of LOCALIZA is its penchant for leadership. It has been by far the biggest car rental network since 1981 and its market share is constantly expanding.

Much of LOCALIZA’s success may be credited to its clearly customer-oriented philosophy. The fleet is new (on average 12 months old) and diversified; The Reservation Center and the Customer Assistance Service work 24/7; The attendants are always cheerful and willing to help. In addition to that, LOCALIZA offers quality programs, speedy car retrieval and return facilitated by an efficient computer system, and, most of all, competitive prices. That explains why frequent satisfaction surveys portray LOCALIZA as a truly customer-oriented company.

Localiza disclose results. Such disclosure aims at highlighting the competitive edge the company holds in the market, particularly the quality and assets most acknowledged and valued by its customers.

LOCALIZA bears a clear focus on business and is always redesigning its organization. It is tireless in the search for excellence, as it knows that past successes do not guarantee future ones and only by constantly improving the quality of its services will it confirm and broaden its participation in the market.

LOCALIZA is a world class company and has realized all crises it underwent as opportunities to grow stronger. It gazes upon the future with optimism but keeps it’s feet on the ground, which is consistent with the its roots in the state of Minas Gerais.

Transparency and Corporate governance

Since its foundation, Localiza has based its conduct based on high standards of corporate governance.

Localiza’s relations, be them with customers, employees, suppliers, stockholders, the press, or the community, are based on an ethical posture which reflect its corporate philosophy, and which aims at keeping solid and long-lasting relationships.

Since 1990, Localiza abides to a code of ethics that guides the organization so as to maintain a socially responsible and integrated posture that respects the culture and particularities of each country and locality in which where it operates.

Since 1997 – when it began the quarterly publication of its accounting statements and of its annual performance reports already converted to USGAAP standards – Localiza has strengthened such practices.

Localiza’s entry into the New Bovespa Stock Exchange, in 2005, cames to confirm its already consolidated and transparent corporate culture.

Localiza acts in this fashion because it believes that corporations which are grounded conformity, equity, and transparency through systematic report of its practices are trustworthy, generate lower transaction costs and promote solid, efficient and lasting relationships.