Los Chinese car manufacturers have set foot in Latin America to conquer the markets of the region.
In the last five years, China quadrupled sales to the region, from US$2.182 billion in 2019 to US$8.564 billion in 2023which represents 20% of the market share measured in money. In this way, the Asian giant became the first supplier of Latin America, according to the International Trade Centre (ITC).
The United States, which held the first place until 2021, ranked second as a supplier with 17%, while Brazil fell to 11% last year, according to an AFP report.
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In the nascent electric vehicle market, Chinese dominance is greater, with 51% of sales in the region and virtually all electric buses are of Chinese origin.
“The growth of Chinese car manufacturers in recent years has been exponential, thanks to significant improvements in quality, technology and design”told AFP Andres Polverigianiautomotive marketing intelligence manager at the consulting firm Nyvus.
In the European Union and the United States, two markets with a strong automotive industry, the imposition of tariffs has prevented China from moving forward with the force that it has done in Latin America.
The Chilean case
The Chilean market, practically free of tariffs, is considered one of the most competitive in the world, where 80 brands from 28 origins offer more than 600 modelss of vehicles.
At its ports, the landing of Chinese cars is almost incessant. “A Chinese car here competes on equal terms with an American or European one. “The lower tariffs have also led to very competitive prices,” Diego Mendoza, president of the National Automotive Association of Chile, told AFP.
Last year, Chinese cars accounted for almost 30% of sales in the country.
While in Chile, Ecuador, Peru or Colombia, China’s aim is to dominate the market, in Brazil and Mexico – the major regional manufacturers – they are looking to sell and produce.
Chinese presence in Brazil
In Camacarí, in the northeast of Brazil, BYD is building the largest electric car factory outside Asia, with a capacity to produce 150,000 vehicles per year. GWM also bought a Mercedes-Benz factory in Iracemápolis (Sao Paulo, east) to produce 100,000 electric units per year.
“Brazil is a country with a large sales volume, still a low presence of electric vehicles and a low presence of Chinese. If I were an executive of a Chinese automotive company, I would also view the Brazilian market with great interest”he told AFP Cassius PagliariniBright Consulting specialist.
China managed to attract consumers after Partner with major manufacturers through alliances which allowed them to reduce the cost of production processes and improve technologies.
According to Ruben Mendezmarketing manager at Movicenter, where cars are sold in Chile, “people were trying them out and adopting them as part of their preferences.”
Regarding prices, José Carlos De Mier, representative in Mexico and Puerto Rico of Nyvus, explains that “in some Latin American countries, brands of Chinese origin are offering more for the same price.”
The presence of Chinese cars has allowed access to the first vehicle to segments of the population middle- or low-income in Latin America.
In addition, it allowed the expansion of cleaner technologies in polluted cities such as Santiago, Bogotá or Mexico City, according to Sebastián Herreros, an economist at the Economic Commission for Latin America and the Caribbean (ECLAC).
More than 2,000 Chinese-made electric buses are in circulation in the capital of Chile. “All our countries have to move quickly towards electromobility “We are facing a challenge of survival, and China is an ideal partner: it has the production scale and the capacity to sell at convenient prices,” adds Herreros.
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