A consumer market in crisisIn 2020, the automotive industry took a hard hit following the outbreak of the COVID-19 pandemic. In Latin America, light vehicles sales in the largest markets dropped by at least 30 percent in the first half of 2020, when compared to the same period of the previous year. However, the health crisis was just an additional blowback to a market already in decline.
Sales of new vehicles in Latin America accounted for below 4.3 million units per year in 2020, a decrease of around 40.8 percent when compared to the nearly 7.5 million units sold at the peak of the decade. This behavior has at least some connection to the economic crisis that hit Brazil – the largest market for car sales in the region – during that period. New vehicle sales in Mexico have also followed a similar trend. But perhaps the most extreme case was reported by Argentina. Amidst economic instability and soaring inflation rates, motor vehicles sales in the country dropped by nearly half in 2019, when compared to a year earlier. Sales reported a further drop to around 333,900 vehicles during the COVID-19 health crisis. With this effect aggravated by the pandemic, a regional recovery may be still far on the horizon.
Market leaders and trends have been consistent the past yearsDespite the decline in sales, South America still accounts for around three percent of light vehicle sales worldwide. Chevrolet had the best-selling car model in the region in the first quarter of 2021. The brand’s parent company, U.S.-based General Motors, was one of the market leaders for light vehicles in Brazil in 2020. The automaker was second only to Fiat Chrysler Automobiles. Meanwhile in Colombia, although the brand has been recently overtaken by French manufacturer Renault when it comes to new vehicle sales, Chevrolet stills leads by a large margin the sales of used vehicles in the country. Ford, Volkswagen, and Toyota are also among the other brands that stand out as leading players in Latin America.
Toyota led the market for hybrid and electric vehicles in Argentina, with the Toyota Corolla and RAV4 recording the largest sales volume. The brand was also popular across the same market in Colombia, where over 6,000 electric and hybrid vehicles were registered in 2020. This rapid increase of close to double the 2019 volume was linked with an increase in consumer interest for more sustainable fuel types, both as a result of the COVID-19 pandemic and of rising transport emissions in the Latin American region. While Latin America is still in the early stages of adopting electric vehicles, electric and hybrid vehicle sales have been steadily on the rise across the region, and this trend is tipped to accelerate as governments transition towards cleaner transport.