Photo: Latin American Car Market Doing Well Overall, Mexico Still Struggling
These days, China is the number one car market, with their spike in car sales making world news, but now, Latin American countries are seeing their sales go through the roof as well.
Last year, in Brazil, over 3.5 million cars and light trucks were sold; an increase of about 86 percent since 2006. Experts believe higher wages and a growing economy account for such a drastic jump.
“In a macroeconomic sense, Brazil has greater stability, more per capita income, more jobs and more credit than before,” said a spokesman for ANFAVEA, Brazil’s largest car manufacturers association. “And consumer confidence is rising, so people are more likely to join the ranks of car owners.”
Brazil is not the only country seeing the car boom. Colombia’s car sales saw a 51 percent gain since 2006 as well. Chile saw a 37 percent jump from February 2010 to the same month this year.
Mexico, however, is not fairing as well, as its economy is closely tied to that of the U.S. While seeing an increase from 2009, numbers are still down from 2006. Dealers blame the opening of Mexico’s market to U.S. used cars for the drop in the country’s sales.
Venezuela’s car market is not fairing much better since President Hugo Chavez began applying higher duties and import restrictions to help with inflation. Venezuela’s inflation is the highest in South America.
GM South America President Jaime Ardila has stated that “the carmaker’s Latin America operation is its most valuable asset in terms of return on investment and growth.”
The increased number of cars on the road, while assisting the economy, is causing a stir in the region as well however. In Bogota, the traffic is so terrible that it has all but halted public transit projects, making the mayor very unpopular.
In Lima, Peru, the air pollution is a point of contention, and laws now require owners to get rid of their cars once the vehicles are 20 years old. Groups in the city are also asking that the government restrict the number of taxis and buses on the road, and to better enforce vehicle emission laws.