The South American automotive market is anticipated to register a CAGR of around 5% during the forecast period, 2021-2026.
South America, a region with countries with the influence of bad national politics, lack of proper education in some sub-regions, and poverty prevailing in some countries, was severely hit by the COVID-19 pandemic. The automotive industry of the region, which relies on imports and exports for revenue generation considerably, saw a dip in the finances due to the global transport halt. During 2013-2015, South America, especially Brazil and Argentina, witnessed a huge cash influx into the automotive industry due to national politics and social movements. This cash inflow was halted due to COVID-19. With the lockdown relaxation worldwide, the industry is looking to get back up the ladder, moving toward more sustainability.
- The prime factors driving the growth for the sales and demand for passenger cars were lower interest rates and improving consumer confidence. For instance, the exports and sales of passenger cars in 2018, compared with the first four months of 2017, witnessed an increase of 50.4% and 9.9%, respectively.
- However, the automotive market in South America is highly vulnerable to the instability of social and political policies, as countries, like Venezuela, are experiencing a slowdown in their economic growth, which drastically impacted the country s automotive industry growth.
- In Brazil, with the improvement in the economy (directly influencing consumer confidence) and rise in credit availability to support the country’s light-vehicle market, growing investment in the country, and strong export demand, the country has been witnessing positive growth in the demand and sales of vehicles.
Key Market Trends
Brazil, Argentina, Chile, and Ecuador to Drive the Market
The passenger car market in South America witnessed considerable numbers in 2020 despite the pandemic. Although the numbers indicate a 216.6% dip in the sales of all types of vehicles in all the countries of the region combined in 2020, considering the pandemic and the pace at which the economy is set to bounce back, with the region being a hotspot for potential investors from all over the world, the industry is expected to recover with good numbers in the coming quarters.
The Brazilian automotive industry’s output fell consistently, following the economic recession that affected production and sales alike. However, the industry is now gathering momentum due to the improvement of the economic indexes directly influencing consumer confidence and increased credit availability to support the country’s light-vehicle market and strong export demand from the South American countries.
With Brazil being a major player in automotive spares export, the number of light and heavy commercial vehicles required for transport is bound to skyrocket in the coming times. This can potentially increase the production and sales of transport vehicles and bring stability to the market economy.
Argentina is the second-largest passenger car market in South America. Although the country witnessed a drop of 18% in sales from 2019 to 2020, strong incentive campaigns by OEMs are expected to boost the sales of passenger cars over the forecast period.
With the industry moving toward a more sustainable production, the research being carried into the electrification of automotive looks promising because the region is a hot investment zone, owing to the growing nature of the market, which can bring in a lot of money and improve the market conditions.
Brazilian Automotive Sector is expeted to thrive.
Brazil is expected to be among the top ten countries with the biggest online automotive aftermarket and part sales globally. The country is forecast to reach a share of 8.9% of this segment by 2026.
Market protection in the form of tariffs and quotas on imports prompted companies to open and/or expand automotive production facilities within Brazil, which helped stimulate the local economy. The Brazilian automotive industry had a production capacity of about 66% of South American automotive production. This capability helps in generating jobs for more than 130 thousand Brazilians. Brazil produced about 2.7 million passenger cars in 2020. Fiat Chrysler Automobiles, General Motors, Renault-Nissan partnership, and Volkswagen Group are some of the leading manufacturers in the light vehicle segment, based on market share. The Brazilian economy started bouncing back in recent years with motor vehicle sales. Vehicle sales amounted to 1.7 million units in 2020. Volkswagen and Renault-Nissan Group vehicles remain the most used vehicles in the passenger cars sector of the country. Recent data shows that the automotive multinational corporation FCA, which markets Fiat, Jeep, and Chrysler, has the highest number of dealerships throughout the Brazilian territory, followed by Ford and Volkswagen. Chevrolet and Volkswagen were also among the most popular car makers, according to Brazilian consumers. In the passenger car segment, General Motors was the brand with the largest market share in Brazil, while the light commercial vehicle market was led by FCA.
A few major manufacturers in the South American automotive market include General Motors, Toyota Motor Corporation, Hyundai Motor Corporation, and Volkswagen AG. Between 2019 and 2020, the GM Group, consisting the General Motors and Chevrolet, saw the majority of sales in the market, with around 647,000 units sold, closely followed by the Volkswagen Group (Volkswagen, Audi, and Porsche) with approximately 510,000 units.
Luxury carmakers, like JLR, are investing in the country, which may boost the country’s automotive industry.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Industry Attractiveness - Porter s Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1 By Vehicle Type
5.1.1 Internal Combustion (IC) Engine
220.127.116.11 Passenger Cars
18.104.22.168 Commercial Vehicles
5.2 By Parts and Components Type
5.2.2 Exterior and Interior
5.3 By Automotive Service Industry (Qualitative Information)
5.3.1 OEM Service Center
5.3.2 Independent Aftermarket Service Center
5.4 By Financing Industry (Qualitative Information)
5.4.2 Automotive Financing Industry
5.5.5 Rest of South America
6 COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.1.1 OEM (by Vehicle Brands) - Market Share Analysis
6.1.2 Auto Parts and Components Suppliers - Market Share Analysis
6.2 Company Profiles*
6.2.1 OEM (by Vehicle Brands)
22.214.171.124 General Motors
126.96.36.199 Toyota Motor Corp.
188.8.131.52 Volkswagen AG
184.108.40.206 Fiat Chrysler Automobiles NV
220.127.116.11 Ford Motor Company
18.104.22.168 Honda Motor Company Ltd
22.214.171.124 Hyundai Motor Company
126.96.36.199 Nissan Motor Company Ltd
188.8.131.52 Groupe Renault
184.108.40.206 Daimler AG
220.127.116.11 Kia Motor Corporation
6.2.2 Auto Parts and Components
18.104.22.168 Robert Bosch GmbH
22.214.171.124 Continental AG
126.96.36.199 Denso Corporation
188.8.131.52 Aptiv PLC
184.108.40.206 HELLA KGaA Hueck & Co.
220.127.116.11 Webasto SE
18.104.22.168 Valeo Group
6.2.3 Auto Financing Suppliers
22.214.171.124.1 Santander Bank
126.96.36.199.2 Banco Bilbao Vizcaya Argentaria (BBVA)
188.8.131.52.3 Itaú Unibanco
184.108.40.206 Automotive Financing Industry
220.127.116.11.1 Toyota Financial Services
18.104.22.168.2 GM Financial (Banco GMAC)
22.214.171.124.3 VW Financial Services
7 MARKET OPPORTUNITIES AND FUTURE TRENDS
8 LIST OF AUTOMOTIVE PRODUCTION PLANTS AND THEIR CAPACITIES