South America Automotive Market - Growth, Trends, and Forecast (2019 - 2024)

The South America Automotive Market is segmented by Vehicle type (Passenger Vehicles and Commercial Vehicles), Parts and Components Type (Powertrain, Exterior and Interior, Tires, and Advanced Driver Assistance Systems (ADAS)), Automotive Service Industry Type (OEM Service Center and Independent Aftermarket Service Center), Automotive Financing Industry Type (Banks and Automotive Financing Industry), and Geography.

Market Snapshot

Market Summary
Study Period:

2018-2024

Base Year:

2018

Key Players:

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Market Overview

The South American automotive market is anticipated to register a CAGR of 4.79% during the forecast period, 2019-2024.

  • The prime factors driving the growth for the sales and demand for the passenger cars were lower interest rates and improving consumer confidence. For instance, the exports and sales of passenger cars in 2018, when 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.

Scope of the Report

The South American automotive industry outlook covers the growing demand for passenger cars and commercial vehicles in the region, Investments done by OEMs to establish their presence in South America and market shares of OEMs.

The South American automotive industry has been segmented by vehicle type, parts and components type, automotive service industry type, and automotive financing industry type.

 

By Vehicle Type
Internal Combustion (IC) Engine
Passenger Cars
Commercial Vehicles
E-mobility
By Parts and Components Type
Powertrain
Exterior and Interior
Tires
Advanced Driver Assistance Systems (ADAS)
By Automotive Service Industry (Qualitative Information)
OEM Service Center
Independent Aftermarket Service Center
By Financing Industry (Qualitative Analysis)
Banks
Automotive Financing Industry
Geography
South America
Brazil
Argentina
Chile
Peru
Rest of South America

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Key Market Trends

Brazil, Argentina, Chile, and Ecuador to Drive the Market

The passenger car market in South America has witnessed healthy growth during the first half of 2018. Car sales in the region have increased by 7.1% to 1.39 million units, as compared to 1.30 million units in Q1 of 2017. This growth was primarily contributed by the Brazil and Argentina markets.

The Brazilian automotive industry’s output has fallen 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 increase in credit availability to support the country’s light-vehicle market, and strong export demand from the South American countries.

  • As a result of low-interest rates on cars and improving customer confidence in Brazil, the automotive sales in the country increased by 14.8% to 527,000 units in Q1 of 2018, as compared to 459,700 units in Q1 of 2017.

Argentina is the second-largest passenger car market in the South American region. Although the country witnessed a drop in sales during Q3, strong incentive campaigns by OEMs are expected to boost the sales of passenger cars over the forecast period.

The passenger cars and light commercial vehicles sales increased by 42.4% in Ecuador and 17.6% in Chile during Q1-Q3 2018.

Passenger Car Sales Q1 2018

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Auto Policies and Incentives Supporting the Growth of the Brazil Automotive Industry

The country is the largest market and the largest producer of automotive in the South American continent. In 2018, Brazil alone accounted for about 50% of the vehicles of all types sold in the region. New vehicles sales increased by 5.2% to 2.87 million units in 2018, as compared to 2.69 million units in 2017.

Brazil had experienced a volatile economy over the past few years, and the GDP growth rate in 2015 was -3.7%, but in 2016, it became -3.3%. Political instability, high inflation, low prices of export of goods, and depressed confidence levels have caused a decline in the Brazilian economy.

Traditionally, Brazil had protectionist policies in place as a part of its Inovar Auto policy to support the local automotive companies from imports by offering tax credits and other incentives. However, the outcome of the policy was increased domestic competitiveness and decrease in imports. The policy did not have any provisions for export promotion, which impacted the industry when domestic demand declined.

However, in 2018, due to the renewed expectations, the improvement of the economic indexes directly influencing consumer confidence, and increase in credit availability to support the country’s light-vehicle market, new automobile sales increased by 23.14%, in January 2018, as per the National Federation of Automotive Distributors. Additionally, overall light vehicle registrations rose to 9.4% in 2017 and 13.8% in 2018, and 2019 has started off with growth.

With the recovering automotive industry, due to the growing exports and the stabilizing economy, the market is expected to grow at a good rate during the forecast period. Additionally, the country has been witnessing a rise in the sales of luxury cars, owing to the increasing demand for SUVs and crossovers.

The commercial vehicles segment is also expected to see increased demand, as the government has prioritized development of infrastructure as a part of its Brazilian Investment Partnership Program launched in 2016.

Brazil New Vehicle Sales

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Competitive Landscape

Some of the major manufacturers in the South American automotive market include General Motors, Toyota Motor Corporation, Hyundai Motor Corporation, and Volkswagen AG. General Motors covered a major share in the market in 2018, and Chevrolet brand vehicles dominated with the highest sales in the region. This is followed by Volkswagen, Nissan, and Toyota.

During the Q1 of 2018, Renault and Fiat introduced new models into the market. The Renault sold 20,119 units of Kwid and Fiat sold 17,522 units of Argo and stood among the top sold cars during the same period.

Luxury car makers, like JLR, has been investing in the country, which may aid in boosting the country’s automotive industry. For instance, JLR invested BRL 750 million (USD 392 million), about four years ago, in 2014, to build its Brazilian factory.

 

Major Players

  1. Renault
  2. General Motors
  3. FCA
  4. Honda
  5. Ford

* Complete list of players covered available in the table of contents below

Automotive Industry Market Share

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Vehicle Type

      1. 5.1.1 Internal Combustion (IC) Engine

        1. 5.1.1.1 Passenger Cars

        2. 5.1.1.2 Commercial Vehicles

      2. 5.1.2 E-mobility

    2. 5.2 By Parts and Components Type

      1. 5.2.1 Powertrain

      2. 5.2.2 Exterior and Interior

      3. 5.2.3 Tires

      4. 5.2.4 Advanced Driver Assistance Systems (ADAS)

    3. 5.3 By Automotive Service Industry (Qualitative Information)

      1. 5.3.1 OEM Service Center

      2. 5.3.2 Independent Aftermarket Service Center

    4. 5.4 By Financing Industry (Qualitative Analysis)

      1. 5.4.1 Banks

      2. 5.4.2 Automotive Financing Industry

    5. 5.5 Geography

      1. 5.5.1 South America

        1. 5.5.1.1 Brazil

        2. 5.5.1.2 Argentina

        3. 5.5.1.3 Chile

        4. 5.5.1.4 Peru

        5. 5.5.1.5 Rest of South America

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

      1. 6.1.1 OEM (by Vehicle Brands) - Market Share Analysis

      2. 6.1.2 Auto Parts and Components Suppliers - Market Share Analysis

    2. 6.2 Company Profiles

      1. 6.2.1 OEM (by Vehicle Brands)

        1. 6.2.1.1 General Motors

        2. 6.2.1.2 Toyota Motor Corp.

        3. 6.2.1.3 Volkswagen AG

        4. 6.2.1.4 Fiat Chrysler Automobiles NV

        5. 6.2.1.5 Ford Motor Company

        6. 6.2.1.6 Honda Motor Company Ltd

        7. 6.2.1.7 Hyundai Motor Company

        8. 6.2.1.8 Nissan Motor Company Ltd

        9. 6.2.1.9 Groupe Renault

        10. 6.2.1.10 Daimler AG

        11. 6.2.1.11 Kia Motor Corporation

      2. 6.2.2 Auto Parts and Components

        1. 6.2.2.1 Robert Bosch GmbH

        2. 6.2.2.2 Continental AG

        3. 6.2.2.3 Denso Corporation

        4. 6.2.2.4 Aptiv PLC

        5. 6.2.2.5 HELLA KGaA Hueck & Co.

        6. 6.2.2.6 Webasto

        7. 6.2.2.7 Valeo Group

      3. 6.2.3 Auto Financing Suppliers

        1. 6.2.3.1 Banks

          1. 6.2.3.1.1 Santander Bank

          2. 6.2.3.1.2 Banco Bilbao Vizcaya Argentaria (BBVA)

          3. 6.2.3.1.3 Itaú Unibanco

        2. 6.2.3.2 Automotive Financing Industry

          1. 6.2.3.2.1 Toyota Financial Services

          2. 6.2.3.2.2 GM Financial (Banco GMAC)

          3. 6.2.3.2.3 VW Financial Services

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. LIST OF AUTOMOTIVE PRODUCTION PLANTS AND THEIR CAPACITY, BY COUNTRY

  9. 9. DISCLAIMER

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