Latin America Passenger Car Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Latin America Passenger Car Market is segmented by Vehicle Type (Hatchback, Sedan, Sports Utility Vehicle), by Fuel Type (Gasoline, Diesel, Electric) and by Country.

Market Snapshot

Latin America Passenger Car Market Overview
Study Period: 2018 - 2026
Base Year: 2020
CAGR: 4.38 %
Latin America Passenger Car Market Key Players

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Market Overview

The Latin America passenger car Market is expected to register a CAGR of 4.38%, during the forecast period, 2020-2025.

The Latin America passenger car market is recovering at a steady pace after most of the countries were strongly affected by currency deviation and economic crisis. The overall passenger car market was boosted by the recovery of the Brazilian market, which accounts for the major market share in terms of exports, production, and sales.

The prime factors driving the growth of the sales and demand for passenger cars were low-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.

Scope of the Report

The Latin American passenger car market has been segmented by vehicle type, fuel type, and geography.

By Vehicle Type
Hatchback
Sedan
Sports Utility Vehicle
By Fuel Type
Gasoline
Diesel
Electric
Geography
Latin America
Brazil
Argentina
Mexico
Rest of Latin America

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Key Market Trends

Rising Sales of Ethanol Driven Cars

Although the passenger car industry in Latin America is dominated by gasoline, ethanol-driven cars recorded good sales during the last three years.

Brazil is the second-largest producer of ethanol, globally. In Brazil, 42% of the vehicles sold use ethanol, making gasoline an alternative fuel in the country. During 2015-2016, 30.23 billion liters of ethanol was produced. Majority of this production is used for the domestic market, where it is sold as pure ethanol fuel or blended with gasoline.

Owing to the increased fuel prices, taxes, and emission standards, ethanol was introduced as a substitute for fossil fuels. In 2016, a total of 20 Latin American countries agreed to push biofuel production. Furthermore, in March 2018, the Brazilian President signed a decree regulating the National Biofuels Policy, which aids the expansion of ethanol and biodiesel in the country's energy mix.

Currently, there are two commercial ethanol production facilities in Brazil, GranBio group and Raizen, with a combined capacity of 132 million liters.

All these factors are contributing to the growth of ethanol-driven passenger cars in the region over the forecast period.

Latin America Passenger Car Market Key Trends

Recovering Automotive Industry in Brazil, Argentina, and Peru

The Latin American market offers a huge potential for the automotive industry, as present car ownership in the region is low and disposable incomes in the region are growing at a higher rate than in the Asia-Pacific region.

The automotive industry witnessed a healthy growth rate, with total sales accounting to 1.39 million units across the nine largest markets in the region.

The social and political instability in the region has always adversely affected the market.

  • The recovery of the Brazilian market resulted in a 13.1% increase sales of cars, reaching 1,781,300 unit sales in the first three quarters of 2018, as compared to the 1.5 million units during Q1-Q3 of 2017.
  • Argentina also contributed to the overall growth of the region. There was an increase in the incentives offered to the customers in the country.
  • Peru has been one of the least affected countries, as the current state of the market can offer good opportunities for the Peru automotive industry in the future.

Several leading automobile manufacturers, such as General Motors, Subaru, Land Rover, etc. have invested in the Latin American market. Additionally, with the implementation of tax cuts on new vehicles, automobile sales are expected to grow significantly.

Latin America Passenger Car Market Growth by Region

Competitive Landscape

Some of the major manufacturers in the market include Nissan-Renault, General Motors, Volkswagen AG, FCA Group, Hyundai-Kia, Toyota Motor Corporation, and Ford. During the first half of 2018, Renault-Nissan has captured the highest market share in terms of volume accounting to 18%, followed by General Motors by 15%, and the VW group with 13%.

Renault-Nissan alliance has a strong presence across the markets like Mexico, Colombia, Brazil, and Argentina. Chevrolet is the most popular brand sold under the GM group. The demand for Hyundai-Kia passenger cars has increased significantly over the last two years, especially in Mexico. 

During May 2019, FCA group has planned to invest USD 4 billion to retain the lost market share in the Brazilian automotive industry. With this development, the company will introduce new models and increase the production capacities at the two facilities in the region. 

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Vehicle Type

      1. 5.1.1 Hatchback

      2. 5.1.2 Sedan

      3. 5.1.3 Sports Utility Vehicle

    2. 5.2 By Fuel Type

      1. 5.2.1 Gasoline

      2. 5.2.2 Diesel

      3. 5.2.3 Electric

    3. 5.3 Geography

      1. 5.3.1 Latin America

        1. 5.3.1.1 Brazil

        2. 5.3.1.2 Argentina

        3. 5.3.1.3 Mexico

        4. 5.3.1.4 Rest of Latin America

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 General Motors

      2. 6.2.2 Fiat Chrysler Automobiles (FCA)

      3. 6.2.3 Volkswagen AG

      4. 6.2.4 Hyundai Motor Company

      5. 6.2.5 Ford Motor Company

      6. 6.2.6 Toyota Motor Corporation

      7. 6.2.7 Renault

      8. 6.2.8 Honda Motor Co. Ltd

      9. 6.2.9 Nissan Motor Corporation

      10. 6.2.10 Suzuki Motor Corporation

      11. 6.2.11 Daimler AG (Mercedes-Benz)

      12. 6.2.12 BMW

      13. 6.2.13 Audi

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Latin America Passenger Car Market Outlook market is studied from 2018 - 2026.

The Latin America Passenger Car Market Outlook is growing at a CAGR of 4.38% over the next 5 years.

Renault-Nissan, General Motors Company, Volkswagen AG, FCA Group, Hyundai Motor Company are the major companies operating in Latin America Passenger Car Market Outlook.

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