A consumer market in crisis
In 2022, the global automotive industry struggled to recover from the impact of the COVID-19 pandemic and semiconductor shortage, and was hit by a wave of inflation and raw material price increases. Despite these challenges, latin american sales were looking up. Light vehicles sales in the largest markets grew by nearly 17 percent in Ecuador, 7.6 percent in Merico, and six percent in Argetina. Brazil was the only key market to report a decrease in motor vehicle sales, partly due to consumer wariness about purchasing big-ticket items as borrowing costs remained high. This downturn incentivized the Brazilian government to launch a subsidy program in June 2023, giving manufacturers tax credits to reduce the selling price of entry-level vehicles.Sales of new vehicles in Latin America amounted to nearly 5.1 million units per year in 2022, a decrease of around 30.9 percent when compared to the nearly 7.4 million units sold at the peak of the decad and some 800,000 units below its 2019 sales, despite sales increasing compared to 2021. 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, in contrast have slowly grown since the pandemic, after a period of four consecutive years of decreased sales. 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, and have been slow to pick back up. With this effect aggravated by the semiconductor shortage, a regional recovery may be still far on the horizon.
Market leaders and trends have been consistent the past years
Despite this slow recovery, South America still accounts for around five percent of light vehicle sales worldwide. Chevrolet had the best-selling car model in the region in 2022. The brand’s parent company, U.S.-based General Motors, was the market leaders for light vehicles in Brazil in 2022. Meanwhile in Colombia, although the brand has been 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 nearly 27,900 electric and hybrid vehicles were registered in 2022. This rapid increase of 57.3 percent more than the 2021 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.
