Latin America

Automotive Sector
Report 2025-2026

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 Regional Overview

Highlights
Latin America's role in the global automotive sector has diminished in the past ten years. In 2023, the region accounted for
7.6% of the world's production and 5.9% of global sales. Nine out of every ten vehicles manufactured in the region are made
in Mexico (57.4%) or Brazil (33.3%). While vehicle manufacturing in Mexico has displayed a growing trend, production in
Brazil has declined consistently. Argentina and Colombia remain minor players. One of the key factors affecting the regional
automotive industry is the dependence on domestic markets and low export competitiveness. Although Mexico has
managed to position itself as a major manufacturing hub, other countries have seen their expansion capacity limited. Latin
America's production is strongly linked to economic and political factors, such as credit stability and commercial vehicle
demand. The region's competitiveness will depend on its ability to strengthen its manufacturing industry, attract foreign
investment and adapt to new mobility trends. To achieve this, it will be key to promote policies that encourage production
and consumption, especially in a global context where innovation and electrification are shaping the future of the industry.

Brazil

In 2024, Brazil’s new car sales grew by 14.15% y/y, to 2.63mn units, mainly driven by a 31% y/y increase in credit supply, with
61% of vehicles financed. The hybrid and electric vehicle (EV) segment surged by 89% y/y, with 177,300 units sold, including
motorcycles, trucks and buses. This growth was led by light commercial vehicles (17.4% y/y) and medium-heavy trucks (21%
y/y), while semi-trailers were the only segment to decline (15.1% y/y). The sector also faced a growing trade deficit in 2024,
with exports falling to 398,484 units, while imports soared to 466,505 units, a 32.5% y/y increase. Automobiles were the most
affected segment, moving from a surplus of 74,403 units in 2023 to a deficit of 24,708 in 2024, driven by a sharp rise in car
imports (of 37% y/y).

The industry's outlook for 2025 remains uncertain, influenced by interest rate rises and a rising US dollar, which raises the
costs of imported components and vehicles. Fenabrave projects slower sales growth of 5% for 2025 due to the challenging
macroeconomic conditions. Anfavea has revised its 2025 growth forecast downwards from 13% to 5.6%, adjusting projected
sales to 2.8mn units and lowering financed purchases from 70% to 45% of total sales. Despite these economic concerns,
foreign investments remain strong, with projects including: General Motors' BRL 7bn modernisation plan; Hyundai’s import
and distribution takeover; BYD’s new production plant, with a 300,000-unit annual capacity; GAC investing USD 1bn; Multi
partnering with Royal Enfield for local motorcycle assembly; and GWM expanding production with 700 new workers.

Government policies, such as tariff protections under the Mercosur-EU trade deal, the Mover programme’s incentives for
R&D and clean technologies, and proposed increases in ethanol blending in petrol could support the sector's long-term
growth. However, challenges remain, including rising competition from foreign brands, and ongoing regulatory uncertainty.
While automakers are maintaining their investment plans, Brazil’s automotive sector faces a period of cautious expansion
amid economic and competitive pressures.

Mexico

In 2024, Mexico's automotive industry consolidated its post-pandemic recovery, with vehicle production growing by 5.6% y/y
to 3.99mn units, while exports increased by 5.4% to 3.4mn units, mainly to the US (79.7%) and Canada (8.5%). Domestic sales
surged by 9.8% y/y, to 1.56mn vehicles, led by Nissan, GM, Volkswagen, Toyota and Kia, which controlled 50.7% of the
market. The sector remains Mexico’s top industrial contributor, representing 4% of GDP and 20.5% of manufacturing GDP.
Electromobility gained traction in 2024, with electric and hybrid sales up by 67.3% y/y to over 124,000 units, supported by an
expansion of charging stations. Despite these advances, labour strikes (at Audi Mexico) and potential US tariff hikes (of 25%)

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 pose risks, alongside Mexico’s high dependence on the US market, which makes it vulnerable to potential trade disputes or
policy changes.

Looking ahead, Mexico aims to expand its automotive footprint with initiatives such as the Mexico Plan, seeking USD 100bn
in annual FDI and a 10% increase in vehicle production by 2030. The launch of Olinia, the first Mexican EV manufacturer, aims
to produce affordable electric cars under USD 5,000 by 2026, strengthening Mexico’s position in sustainable mobility. The
country is also emerging as a global auto parts leader, projected to surpass Japan as the world’s third-largest producer.
However, Trump’s potential return to the US presidency threatens the USMCA with proposed 100% tariffs on Chinese-made
cars in Mexico, creating uncertainty. Despite these challenges, nearshoring trends, free trade agreements and government-
backed industrial policies continue to attract record FDI, solidifying Mexico’s role as a key hub in the global automotive
industry.
Colombia

In 2024, the Colombian automotive sector experienced a two-phase trajectory, with an initial sales decline followed by a
strong recovery. By August, sales rose by 11.5% y/y, driven by the SUV segment, which grew by 24% y/y and accounted for
53.5% of new vehicle registrations. The motorcycle segment also thrived, with 815,601 units sold (a rise of 20.2% y/y),
reinforcing Colombia’s status as the third-largest motorcycle market in Latin America. UMA Group’s USD 30mn Bajaj
assembly plant in Pereira will further strengthen domestic production, with 95% of motorcycles sold in Colombia assembled
locally.

The sector also saw rapid electrification, with EV sales surging by 148% y/y and hybrid sales rising by 56% y/y. BYD and Hino
assembled the first electric articulated bus chassis in Cota, aiming to participate in TransMilenio’s 2025 tender, potentially
making Colombia home to the world’s largest electric bi-articulated bus fleet. However, challenges remain, including trade
tensions with Brazil, insufficient charging infrastructure, and high EV costs due to battery prices and installation fees. The
termination of tariff preferences with Brazil raises concerns about price increases and market competitiveness, while
digitalisation is emerging as a key growth driver, with companies such as WCAR doubling its sales through online platforms.
Looking ahead to 2025, projections indicate 220,000 new vehicle registrations, supported by government incentives for fleet
modernisation and growing interest in sustainable mobility.

Argentina

In 2024, Argentina's automotive sector faced significant challenges, with vehicle production falling by 17.1% y/y to 506,571
units, although sales increased somewhat by 1.1% y/y. Despite declines for major brands such as Toyota (9.4% y/y) and
Renault (31.2% y/y), others, including Volkswagen (13.9% y/y), Citroën (16.7% y/y) and Jeep (44.2% y/y), helped sustain
growth. Heavy vehicle sales also expanded, driven by Mercedes-Benz (17.3% y/y), Volkswagen (191.3% y/y) and Foton
(288.8% y/y). Looking ahead, 2025 is expected to see production increase by 7% to 9%, raising output to 545,000 units.
Exports are expected to grow by 8% to 324,000 vehicles, fuelled by government reforms, investment incentives and
improved financing availability. The removal of the PAIS tax on imports has already led to lower vehicle prices, strengthening
demand, while major investments, such as Stellantis’ USD 385mn in Córdoba, aim to boost production by 10% to 15%.

The government's tax and trade reforms are expected to reshape the industry, including raising the vehicle tax threshold by
100% and cutting the top bracket from 35% to 20%, which will ease pricing pressure on mid-range cars. The lowering of local
content requirements to 5% industry-wide and 2% for imported models will allow greater vehicle and component imports,
although it poses risks for local auto parts manufacturers. Meanwhile, Tesla’s market entry in 2025, supported by the
automatic homologation of US and European-certified cars, will accelerate EV adoption, the charging infrastructure and
premium vehicle competition. Despite economic volatility and rising competition from Asian brands, Argentina's automotive
sector is poised for growth, with a projected 20% increase in sales, to 500,000 domestic units sold, and an optimistic 5.5%
GDP expansion, driven by foreign investment and greater market openness.

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 Ecuador

In 2024, Ecuador’s automotive sector experienced a significant contraction, with new vehicle sales down by 18.2% y/y to
108,266 units. The light vehicle segment declined by 19.5% y/y, while heavy vehicles underwent a 4% drop. This decline was
fuelled by economic instability, high taxes, reduced credit availability and a weak liquidity environment. Insecurity and an
energy crisis further dampened consumer confidence. Since 2015, Ecuador has been a net vehicle importer, a trend
intensified by General Motors’ factory closure in Quito, which once represented 51% of local production. Additionally, the
proposed tax on used vehicle transfers has raised concerns about its impact on demand.

Despite sector challenges, Ecuador is advancing in electric mobility. Electric and hybrid vehicle sales grew by 18.2% y/y in
2024, reflecting a shift towards more efficient models. Uber Green launched electric vehicle rides, while Laboratorios Bagó is
aiming for 75% of its fleet to be electric or hybrid by 2030. The government is also promoting electromobility, although the
charging infrastructure remains limited, with high insurance costs and slow technical service hindering adoption. Looking
ahead to 2025, the sector will depend on economic stability, liquidity conditions and access to credit, while brands such as
BYD and Hyundai will push the EV adoption and sustainable vehicle solutions, positioning Ecuador for a long-term industry
transformation.

Production
Worldwide vehicle production increased from 87.5mn in 2013 to 93.5mn in 2023, or at a CAGR of 0.7% over the 10 years.
However, most of this growth was concentrated in Asia, particularly China. In 2023, the country accounted for 32.3% of global
production, or 30.2mn units, which was 7pp higher than its share in 2013 (of 25.3%), when it produced 22.1mn vehicles.
Production in the rest of the world has remained virtually unaltered.

Vehicle manufacturing in Latin America decreased during the same period, as the sector did not manage to break the
7.69mn record output registered in 2013. In that peak year, the region accounted for 8.8% of global production. In 2023,
6.97mn vehicles were produced in the region, or 7.5% of the total. Nine out of every ten vehicles manufactured in the region
are made in Mexico (57.4%) or Brazil (33.3%). While, in 2013, two-thirds of all manufactured vehicles were passenger cars, in
2023 light commercial vehicles accounted for over half of the region's output.

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 Motor Vehicle Production

16 60

12 11.9 45
Unit mn

31.3
8 30
7.3

4 15

0 0
2005 2010 2015 2020

Latin America US & Canada China (RHS) Rest of the World (RHS)
Sources: CEIC, OICA

Motor Vehicle Production by Region, 2023 Motor Vehicle Production in Latin America, 2023

0.8 %
0.3 %
7.6 %
7.0 %

20.0 %
40.8 %

35.0 %

57.7 %

30.9 %

Asia & Oceania Europe Mexico Brazil

US & Canada Latin America Argentina Colombia
Africa Sources: CEIC, OICA
Sources: CEIC, OICA

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 Motor Vehicle Production in Latin America by Type

5.1
4.8
4.5 4.3 4.4 4.2
4.1 4.0
3.8
3.6
3.3
Unit mn

3.0 3.0 3.1

3 2.9 2.9 2.8
2.6 2.7
2.2
2.0 2.0 2.0

1.5

0.4 0.3 0.3 0.2 0.3 0.3 0.2 0.3 0.4 0.3 0.3
0.2
0.0 0.0
0
2014 2016 2018 2020 2022 2024

Passenger Car Light Commercial Vehicle Heavy Truck Bus

Sources: CEIC, OICA

Sales
Excluding China, motor vehicle sales have still not recovered from the pandemic. In 2023, 62.6mn units were sold, 5.4% less
than the 66.3mn sold in 2019. In contrast, Chinese sales increased by 16.6% during the same period. In Latin America, sales
were 6.7% lower than before the pandemic. The situation is even worse when compared to a decade ago, when 7.37mn
motor vehicles were sold, 1.9mn more units than in 2023. The region has not been able to replicate the results achieved
during the commodity boom of the mid-2010s, which is part of a wider sub-par growth trend. As the most populated
country, Brazil is the region's centre for motor vehicle consumption, accounting for 2.3mn units, or 45.7% of the region's
total. Mexico is the second-largest market, with 1.4mn units sold in 2023.

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 Motor Vehicle Sales

24 48

41.3
39.2 38.0 39.2 38.6 19.8 19.8 19.7 19.5 39.5
19.1 37.2 38.1 18.7
18.2
18 34.4 17.7 35.2 17.8 36
16.5 33.5 17.1
15.8 31.4
15.2 14.7
28.0 28.9 28.1
13.4 25.8 25.3 26.3 26.9
Unit mn

12.1 24.7
12 23.5 24
22.0
19.3
18.1 18.5
13.6 6.9 7.2 7.4
6.4 6.7
5.9 5.9 6.0 5.9
6 5.5 5.7 5.4 5.7
4.9 5.1 5.4 5.9 12
4.3 4.6 4.3
5.8

0 0

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Latin America US & Canada China (RHS) Rest of the World (RHS)
Sources: CEIC, OICA

Motor Vehicle Sales by Region, 2023 Motor Vehicle Sales by Country, 2023

1.1 % 2.3 %
6.2 % 2.7 %

19.1 % 3.4 %

5.4 %

7.5 % 48.3 %
53.9 %

19.6 % 28.5 %

Asia, Oceania & Middle East Brazil Mexico

Europe Argentina Chile
US & Canada Colombia Peru
Latin America Ecuador Puerto Rico
Africa Sources: CEIC, OICA
Sources: CEIC, OICA

EV Sales
In 2024, Chile recorded the highest growth, with a 186% y/y increase in EV sales, followed by Brazil (89% y/y), Mexico (67%
y/y) and Colombia (65% y/y). Argentina and Ecuador had more moderate increases of 48% y/y and 18% y/y, respectively. In

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 terms of the compound annual growth rate (CAGR), the region registered 55% between 2019 and 2024. Chile led with 78%,
followed by Colombia (75%) and Brazil (72%).

EV Sales by Country

Country 2019 2020 2021 2022 2023 2024

Brazil 11,924 19,786 35,303 50,011 93,908 177,377

Mexico 25,608 24,405 47,079 51,065 74,318 124,303

Colombia 3,134 6,008 17,702 27,845 31,501 51,891

Chile 1,190 1,012 3,348 6,904 7,469 21,357

Ecuador 1,470 1,235 4,628 7,205 12,275 14,504

Argentina 1,548 3,488 5,903 7,848 9,601 14,175

Total 44,874 55,934 113,952 150,878 237,314 403,607

Source: AEADE, ANFAVEA, INEGI, ANCA, ANDEMOS, CEIC, KPEnergy, ANDI, TN, Statista, La República Newspaper, El Economista

Newspaper.

Sources

AEADE, ANCA, ANDEMOS, ANDI, ANFAVEA, CEIC, El Economista Newspaper, INEGI, KPEnergy, La República Newspaper, OICA,
Statista, TN.

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 Brazil

Sector Snapshot
In 2024, new vehicle sales in Brazil grew by by 14.2%, to reach a total of 2.63mn units, mainly driven by a 31% y/y increase in
credit supply, as 61% of car and light vehicle sales were financed. This growth was also reflected in the hybrid and electric
vehicle segment, which recorded an 88.9% y/y increase, with a total of 177,377 units sold, including electric motorcycles,
trucks and buses. Despite this dynamism, Fenabrave projects a more moderate growth rate of 5% y/y for vehicle sales in
2025, due to the expected impact of rising interest rates.

Sales growth in Brazil's automotive sector between 2023 and 2024 was mainly driven by light commercial vehicles (17.4% y/y)
and medium-heavy trucks (21% y/y), with the highest growth rates. Light vehicles overall grew by 14.1% y/y, with cars
standing out by increasing 13.2% y/y, and light commercial vehicles. In the truck category, semi-heavy (21% y/y) and heavy
(18% y/y) trucks saw the biggest boost, while semi-trailers were the only line to decrease (by 15.1% y/y). The bus segment
also contributed to total growth, with an increase of 9.8% y/y.

The automotive sector in Brazil had a significant trade deficit, with 398,484 units exported and 466,505 imported in 2024,
resulting in a negative balance of 68,021 units, a notable deterioration compared to 2023, when the sector had a surplus of
51,930 units. This drastic change is explained by a considerable increase in imports, by 32.5% y/y, while exports decreased by
1.3% y/y. Automobiles were the most affected segment, moving from a positive balance of 74,403 units in 2023 to a deficit of
24,708 in 2024, driven by a sharp rise in car imports (of 37% y/y). Light commercial vehicles, although increased in terms of
exports, faced a deeper deficit of 58,893 units. In contrast, trucks maintained a surplus, of 10,791 units in 2024, as exports
increased by 5.6% y/y. This all highlights a Brazilian market that is increasingly dependent on imports, especially in the car
segment, which puts pressure on local manufacturers and creates challenges for the competitiveness of the national
industry.

Drivers and Constraints

Drivers

Vehicle finance as a gateway to new customers: Auto finance has become a strategic tool for banks in Brazil, which
use it as a first point of contact with potential customers to then offer them a range of financial products, such as
current accounts, credit cards and insurance. Banks such as Santander, Bradesco and BV have intensified this
strategy, leveraging their leadership in vehicle financing to expand their user base. Integration with digital platforms,
such as Webmotors and NaPista, facilitates direct interaction with buyers, driving car sales and generating additional
business opportunities, resulting in significant increases in financial services revenues.
Tariff protection for Brazilian automotive industry: The trade agreement between Mercosur and the EU has
established an extended tariff elimination schedule and a specific safeguard mechanism for the automotive sector, in
order to protect the investments announced by manufacturers in Brazil, which exceed BRL 100bn. The tariff phase-
out will be extended to 18 years for electrified vehicles, 25 years for hydrogen vehicles and 30 years for new
technologies, each with an initial grace period of six years. This scheme, unprecedented in other trade agreements,
aims to prevent imports of European vehicles from damaging the local industry, already hit by competition from
Chinese electrified vehicles. In addition, Brazil will be able to temporarily suspend tariff reductions, or reinstate the
original tariffs if the increase in imports affects its industry, without the need for compensation to the EU. This
agreement provides the Brazilian automotive sector with crucial time to adapt, innovate and strengthen its
competitiveness in the face of global trade challenges.
Innovation and sustainability boost: The Mover programme is emerging as a crucial catalyst for the sustainable
development of the automotive sector in Brazil by providing financial incentives aimed at fostering research,
development and technological production. With 69 authorised companies, including giants such as Toyota,
Volkswagen, General Motors and Ford, the programme facilitates access to loans for investment in innovation,
promoting the use of clean technologies and emissions reductions. This financial support reduces barriers for

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 companies to adopt more sustainable processes and modernise their production, which strengthens their global
competitiveness. In addition, the creation of the National Fund for Industrial and Technological Development ensures
continued resources for the auto parts industry, while projects such as the relocation of Fiat Chrysler's engine plant,
with significant investment and job creation, highlight how Mover can attract new investment and talent to the
country. This initiative not only drives the transition to greener mobility, but also positions Brazil as a benchmark in
automotive innovation, enhancing its ability to compete in an increasingly demanding global market.
Constraints

Regulatory challenges and competitive pressure: The Brazilian automotive sector faces a significant challenge
from recent tariff hikes and increasing competitive pressure from Chinese brands, which have managed to mitigate
the immediate impact of the taxes through advance import planning. Despite gradual increases in the import tax on
electric and hybrid vehicles, which will reach 35% in 2026, Chinese brands have maintained stable prices due to a
substantial inventory of more than 81,000 units in August 2024, enough to supply the market for nine months.
Therefore local manufacturers, represented by Anfavea, have asked the government to increase to the maximum the
allowable tariff. Regulatory uncertainty and tensions between established brands and new international players
represent a constraint for the sector, as local companies face rising costs, while foreign brands, especially Chinese,
maintain their competitive advantage.

Labour and Reputational Problems in Brazil's Automotive Industry: The recent scandal at BYD's Camaçari plant
(in December 2024), where 163 workers were rescued from slavery-like conditions, exposes a serious problem in
Brazil's automotive sector, the lack of oversight in the labour practices of sub-contractors. This incident not only
affects the reputation of BYD, which is investing significantly in the country, but it also raises concerns about labour
rights compliance in a labour-intensive industry. Exposure to this type of situation can deter future investment,
increase regulatory scrutiny and damage consumer confidence, representing a major obstacle to the sustainable
growth of the Brazilian automotive sector.

Market Opportunities
Increasing ethanol blending in petrol as a potential opportunity for the automotive sector

Brazil's Ministry of Mines and Energy has approved a test protocol to assess the technical feasibility of increasing the blend
of anhydrous ethanol in petrol to 30% (E30) from the current 27%. The tests, to be conducted between January and February
2025 by the Mauá Institute of Technology, will include cold start evaluations, emissions measurement, stability tests and data
analysis using the OBD (On-Board Diagnostics) system. This increase, contemplated in the Future Fuel Law, could represent
an opportunity for the automotive sector by incentivising the development of more efficient and sustainable flex-fuel
engines, as well as stimulating collaboration between vehicle manufacturers and biofuel producers. Furthermore, the
participation of entities such as Anfavea, Unica and Abraciclo ensures that the results will be representative of the
technological diversity of the Brazilian vehicle fleet, which could facilitate the industry's adaptation to new environmental
and consumption requirements.

Leveraging discontinued assembly lines as a potential boost for the Brazilian automotive industry

The federal Mover programme, the successor to Rota 2030, presents an opportunity for the Brazilian automotive industry by
allowing imports of used assembly lines that will be discontinued in other countries, especially in Europe and the US, where
production lines for combustion vehicles are being replaced by electric models. This measure, according to Márcio de Lima
Leite, president of Anfavea, could strengthen Brazil's production capacity by taking advantage of existing infrastructure,
reducing installation costs and promoting competitiveness. However, the sector remains cautious to avoid a negative impact
on the local machinery industry. At the same time, Leite expressed concern about the increase in vehicle imports, which
reached 17.7% of sales in 2024, compared to 15.2% a year earlier, driven by the accumulation of inventory prior to the tax
hike on hybrids and electric vehicles, which could represent a challenge for domestic production.

Sustained Growth of Electrified Vehicles in Brazil

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 A study conducted by Boston Consulting Group for Anfavea highlights a significant market opportunity for the automotive
sector in Brazil, projecting that electrified vehicles (hybrid and electric) will account for more than 90% of new vehicle sales by
2040, overtaking combustion models by 2030. This sustained growth, driven by the entry of Chinese brands, such as BYD,
GWM and Zeekr, presents a favourable outlook for investments in charging infrastructure, local production and development
of new technologies. In addition, the growing demand for electric buses and trucks, which could account for 60% of the
market by 2040, underlines the need for innovations and strategic partnerships. The possibility of reducing 281mn tonnes of
CO2 through innovative technologies and biofuels between 2023 and 2040 positions Brazil as a potential leader in
sustainable mobility, encouraging local and international companies to invest in this developing ecosystem.

Sector Outlook
A key concern is the recent interest rate rise by the central bank's Monetary Policy Committee (Copom), which has prompted
Anfavea, the national automakers' association, to drastically reduce its sales growth forecast for the coming year, from nearly
13% to just 5.6%. This more pessimistic outlook reflects the potential impact of higher interest rates on consumer spending
and, crucially, vehicle sales. Anfavea had initially projected sales of 3mn units for 2025, but the Copom decision has forced a
downward revision to 2.8mn, with a knock-on effect on financed purchases, potentially dropping from a projected 70% to
around 45% of sales. The industry is also grappling with the effects of a rapidly depreciating currency, which, as Anfavea's
president Márcio de Lima Leite points out, could make imported components and vehicles more expensive, further
impacting profitability. While major automakers have not yet altered their substantial investment plans, the prospect of
reduced sales and increased costs, coupled with Brazil's continued struggle to "export taxes" despite some reforms, is
creating a sense of unease throughout the sector.

Despite the uncertainties, automakers are currently maintaining a cautious approach, with no immediate changes to existing
investment strategies. Production is still anticipated to grow, albeit at a reduced rate of 6.8%, driven by new investments and
the arrival of new factories, particularly from Chinese brands. Exports are also forecast to rise by a similar percentage.
However, the long-term outlook remains clouded by several factors, including the termination of a key trade agreement with
Brazil and the potential for increased tariffs on imported hybrid vehicles. These trade-related issues, coupled with the
intense competition from a growing number of brands in the market, are adding to the challenges facing the industry. While
automakers are committed to navigating these difficulties, the coming year is expected to be a period of significant
uncertainty and potential disruption.

Sector Forecasts (thou units)

Segment 2024 2025 (f) Y/Y Change (f)

Motor Vehicle Production 2,550 2,749 7.8%
Light Vehicle Production 2,381 2,580 8.4%
Heavy Vehicle Production 169 169.4 0.2%
Motor Vehicle Exports 399 428 7.4%
Light Vehicle Exports 376 405 7.7%
Heavy Vehicle Exports 22.7 23.2 2.2%
New Motor Vehicle Sales 2,635 2,802 6.3%
Light Vehicle Sales 2,488 2,653 6.6%
Heavy Vehicle Sales 147.3 149.2 1.3%
Source: ANFAVEA

* Production and Export Volumes include CBU units only

Production

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 Despite growing competition from international players, the Brazilian automotive sector managed to increase its output in
2024. Automobile production in the country reached 2.55mn units, which was 9.7% higher than the 2.32mn units produced
in 2023. Notably, 93% of this production corresponded to light vehicles, with 1.89mn cars and 485,600 light commercial
vehicles. While car manufacturing registered 6.3% y/y growth, light vehicles production expanded by 15.2% y/y. Trucks
maintained a 6% share in vehicle manufacturing, with 141,252 units produced, which was 40.5% higher than in 2023.

In terms of brands, Fiat (23%), General Motors (18%) and Volkswagen (17%) accounted for almost six out of every ten cars
manufactured in Brazil. While Fiat managed to grow its production by 4.8% to 400,376 units, General Motors and Volkswagen
witnessed declines of 16.8% y/y and 0.4% y/y, respectively.

Automobile Production

4 40

29.6

3 20

9.7
Unit mn

2 0

%
3.7

2.5
1 -20

0.7
0 -40
1980 1985 1990 1995 2000 2005 2010 2015 2020

Production y/y change, %

Sources: CEIC, ANFAVEA

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 Automobile Production by Type of Vehicle, 2024 Cars Production by Brand, 2023

1%
3%
6%
4% 23 %
5%

7%

12 %

18 %

12 %

17 %
93 %

Light Vehicles Trucks Bus Fiat General Motors

Sources: CEIC, ANFAVEA Volkswagen Toyota
Hyundai Caoa Renault
Honda Nissan
Peugeot Citroen
Sources: CEIC, ANFAVEA

Sales
New automobile sales in dealerships amounted to 1.95mn units in 2024. Although the figure is 13.2% higher than the
1.72mn sold in 2023, new car sales are still 31.3% lower than the 2.84mn units sold during the peak of the market of 2012. In
contrast, the used vehicles market reached record highs in terms of sales. In 2024, 9.95mn used vehicles were sold, 9.2% y/y
higher than in 2023. As for used motorcycles, 3.49mn units were sold in 2024. The segment has posted a CAGR of 3.1% over
the past five years.

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 Vehicle Sales

4 10.5
9.9
9.7
9.5 3.5
9.3 9.3 3.3 9.1
3.2 9
8.6 8.6 3.0 8.7
2.8 2.9 2.9
2.8 2.8 2.8
2.7 8.1
2.6
2.6
Unit mn

Unit mn
2.5 7.5
2.4 7.5 7.5
2.2 7.2 2.3
2.1 2.1
2.0 1.9
1.9
6.2 6.2 1.7 1.7
6.0 6.1 1.6 1.6 1.6
1.6 5.8 6
1.4

0.8 4.5
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

New Automobiles Used Cars (RHS) Used Motorcycles

Sources: CEIC, BCB, FENABRAVE

External Trade
Since 2018, Brazil has posted a net trade deficit in the vehicles sector. The negative results are part of a wider trend that has
existed since 2009, as the sector has only registered a trade surplus in 2016 and 2017 since then. During the past five years,
exports have grown at a CAGR of 5.2%, while imports posted a CAGR of 9.7%. Higher imports growth explains an expanding
trade deficit, from USD 5.3bn in 2019 to USD 11.2bn in 2024. The sector's trade balance has been continuously affected by
new international players flooding the Brazilian market, particularly from Asia.

Vehicles External Trade

30

22.6 21.3 22.4 23.1

19.5 18.6
17.3 16.4
14.7 15.1 14.5 14.4
15 13.3 13.8 12.6 14.1 13.6 12.6 11.9
11.5 12.3 12.1 11.8
9.8 9.6 10.0 9.2 9.8 9.0
8.4 8.3 8.5
6.0 5.7 5.1
3.8 4.5 2.5 3.2
4.2
2.9
1.8
USD bn

0.6 1.0
0 -2.5
-3.0 -4.0 -3.0
-5.1 -5.3 -5.5 -4.0 -6.0
-8.9 -8.7 -8.3
-9.7 -11.2
-15

-30
2005 2010 2015 2020

Exports Imports Trade Balance

Sources: CEIC, SECINT,COMEXSTAT

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 Competitive Landscape
In 2024, the automotive sector in Brazil experienced a dynamic year marked by strong investments, technological
advancements and notable growth in sales and production. General Motors announced an investment plan of BRL 7bn for
2024 to 2028, allocating BRL 5.5bn to modernise its plants in São Paulo to produce a hybrid flex model. Hyundai Motor Brazil
took control of the import and distribution of vehicles, leaving Caoa with local production and consolidating a unified
portfolio of its 250 points of sale. Eve Air Mobility, a subsidiary of Embraer, raised USD 94mn to develop eVTOL aircraft and
urban air traffic management software, while Marcopolo unveiled its first hybrid ethanol bus, with commercial production
scheduled for H2 2025.

BYD doubled its international sales, led by Brazil, and announced the local production of two models designed for the
country and a hybrid ethanol engine, with its plant in Camaçari ready to produce 300,000 vehicles annually. Fiat (Stellantis)
launched its first "mild hybrids" produced in Betim, offering an accessible and sustainable solution, while Scania sold its first
electric truck in Brazil, to be produced in Europe from 2026, complementing its range of alternative energy vehicles. Multi
partnered with Royal Enfield to assemble motorcycles in Manaus, GAC announced a USD 1bn investment, agreements with
universities and production plans for 2025, and GWM began the nationalisation of parts and hiring of 700 employees to
produce an SUV and a pick-up at its plant in Iracemápolis. Abraciclo reported a record 1.72mn motorcycles produced (up by
9.3% y/y).

Market Shares: Top Ten Four-Wheel Motor Vehicles Sellers

Sales y/y Market

Ranking Brand 2023 Sales 2023 Share 2024 Sales 2024 Share
Change Gain/Loss (pp)
1 FCA 619,639 26.8% 672,286 25.5% 8.5% -1.3
2 Volkswagen 345,036 14.9% 400,455 15.2% 16.1% 0.3
3 General Motors 328,144 14.2% 315,093 12.0% -4.0% -2.3
4 Hyundai 218,290 9.5% 267,283 10.1% 22.4% 0.7
5 Toyota 193,164 8.4% 204,942 7.8% 6.1% -0.6
6 Renault 126,207 5.5% 139,216 5.3% 10.3% -0.2
7 Honda 72,050 3.1% 91,468 3.5% 27.0% 0.4
8 Nissan 72,558 3.1% 87,460 3.3% 20.5% 0.2
Peugeot
9 67,207 2.9% 61,972 2.4% -7.8% -0.6
Citroën
10 Mercedes-Benz 47,093 2.0% 51,134 1.9% 8.6% -0.1
- Others 219,301 9.5% 343,595 13.0% 56.7% 3.5
- Total 2,308,689 100% 2,634,904 100% 14.1% -
Source: ANFAVEA

Sources

ANFAVEA, Estado Conteudo, Valor Economico Newspaper.

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 Mexico

Sector Snapshot
Mexico's automotive industry is the country's main industrial engine. In 2024, the sector accounted for 4% of the nation's
GDP and 20.5% of manufacturing GVA, according to the Mexican Automotive Industry Association (AMIA). After two years of
declines due to shortages of inputs, particularly semiconductor chips, Mexican automotive production had already
rebounded in 2022 with growth of 9.2% y/y, while exports increased by 5.9% y/y and domestic sales by 7% y/y, laying the
foundations for the positive performance of the following years. In 2023, the sector's output grew by an additional 14.2% y/y,
while exports and domestic sales expanded by 15.2% y/y and 24.4% y/y, respectively.

In 2024, the sector maintained its upwards trajectory. Vehicle production grew by 5.6% y/y to a total of 3.99mn units
manufactured, approximately 210,000 more than in 2023, according to the National Institute of Statistics and Geography
(INEGI). Exports also increased by 5.4% y/y, to 3.4mn units, of which 79.7% went to the US and 8.5% to Canada, highlighting
the strong dependence on the North American market. In the domestic market, sales grew by a remarkable 9.8% y/y, with
1.56mn cars sold, exceeding the 2023 total of 139,000 units. Volkswagen positioned itself as the third best-selling brand in
the country. KIA posted a record-breaking year in 2024, surpassing 100,000 units sold and becoming the first brand to break
this barrier within its first ten years of market presence.

The Mexican government has announced ambitious projects, such as the production of affordable electric vehicles under the
Olinia brand, with prices estimated at USD 4,400 and a focus on urban mobility through regionally produced electric mini-
cars, with an initial budget of MXN 25mn. However, the landscape faces challenges, such as the possibility of 25% tariffs on
Mexican cars by the US, which could raise prices and affect bilateral trade. Furthermore, the recent strike at the Audi Mexico
plant, which halted production of more than 700 vehicles daily, reflects the new labour challenges following the USMCA
reforms. Despite these challenges, collaboration between the government, the private sector and academic institutions in
electromobility projects and local production positions Mexico as a key player in the global automotive industry, balancing
growth opportunities with geopolitical and labour risks.

Drivers and Constraints

Drivers

Betting on producing affordable electric vehicles: Following Tesla's withdrawal, Mexico sees a market opportunity
through the state-owned Olinia, an electric vehicle manufacturer. The company was granted EUR 1.2mn from the
government's budget to produce affordable EVs for USD 4,400 by 2026. The government intends to present the first
model during the FIFA World Cup inauguration in June 2026. Notably, the project uses available regional
manufacturing without a new plant, positioning Mexico as a key competitor in accessible electromobility.
Integrated production chains: Free trade agreements, such as the USMCA, have strengthened integrated
production chains in the Mexican automotive industry, raising its share of vehicle manufacturing in North America
from 7% in 1994 to the current 25%. The USMCA, which replaced NAFTA in 2020, requires a Regional Content Value
(RCV) of 75% for vehicles, boosting local auto parts production and benefiting Mexico due to its capacity and
competitive costs. With 23 assembly plants and contributing 21% of manufacturing GDP, Mexico has positioned itself
as the most connected and industrialised economy in Latin America, benefiting brands such as Ford, GM and Nissan,
and highlighting the importance of collaboration with the academic sector and investments in infrastructure to
maintain its competitiveness.
Mexico aims to be the third-largest global producer of auto parts: Mexico is emerging as an undisputed leader in
the global auto parts industry, with real possibilities of surpassing Japan and positioning itself as the third largest
producer in the world. This growth is attributed to compliance with the USMCA agreement and its strategic proximity
to the US, its main export market. Despite challenges arising from a global economic slowdown and the transition to
electromobility, the country has kept breaking export records and registering significant investments. Key strategies
include regional collaboration, digitisation and fostering local suppliers to maintain competitiveness. The importance

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 of public-private partnerships and investment in technological infrastructure to support the development of electric
vehicles in Mexico is emphasised.
Largest vehicle manufacturer in the region: Mexico secured the seventh position globally and the first position in
Latin America in terms of vehicle production in 2023, highlighting the country's competitive advantage in vehicle
manufacturing.
Constraints

Trump threatens the stability of the USMCA: Donald Trump's presidency poses a significant challenge to the
Mexican automotive industry, as he has promised to impose a 100% tariff on cars made in Mexico by Chinese
companies and a general 10% tariff on all imports. The Chinese investments in Mexico reached USD 3.77bn in 2023.
In addition, the possible renegotiation of the USMCA in 2026 creates uncertainty for the operations of giants such as
Tesla, which has already paused its investment plans in Mexico. Although Mexico has benefited from global trade
disputes, dependence on the US market and new protectionist policies threaten the sector's outlook, forcing
companies to rethink their production and investment strategies.

Dependence on the American market: Mexico reached a milestone in 2024 by producing 3.9mn light vehicles (a
5.6% y/y increase) and exporting 3.4mn units (5.4% y/y increase), achieving three consecutive years of growth after
the pandemic and the semiconductor shortage. However, 79.7% of exports went to the US, underlining the country's
strong dependence on its main trading partner, a risk in the face of possible changes in North American import
policies. The automotive industry, which represents 4% of GDP and 20.5% of manufacturing GDP, has shown
resilience, but its high exposure to the US market poses vulnerabilities to trade tensions or economic crises in the
region.

Market Opportunities
A Booming Market Opportunity in the Automotive Industry

Mexico offers a significant market opportunity in the automotive industry thanks to the remarkable flow of foreign direct
investment (FDI), which reached USD 36bn in 2023 (up by 27% y/y) and a 9% y/y rebound in Q1 2024. Some 56% of this FDI
was destined for the manufacturing sector, where auto parts (16%) and automobiles (9%) stand out as key areas. The country
attracted significant investments from companies in the US (USD 20bn), Germany (USD 5.7bn) and Argentina (USD 4.4bn).
This landscape, driven by the nearshoring phenomenon, positions Mexico as a strategic destination for companies to
relocate their production chains, taking advantage of their proximity to North America. In addition, the automotive industry
leads job creation, with 26,673 new positions (49% of the total), consolidating the country as an attractive hub for investment
and expansion in the region, with growth increasingly distributed across various states.

The Mexico Plan: Unlocking Automotive Potential

The Mexico Plan, presented by president Claudia Sheinbaum, represents a significant market opportunity for the automotive
industry, with the ambitious goal of attracting USD 100bn in annual FDI and increasing national content in the global value
chains of strategic sectors, such as automotive, aerospace and semiconductors, by 15%. This plan includes the creation of
1.5mn jobs in specialised manufacturing, access to financing for 30% of SMEs and the training of 150,000 professionals a
year, consolidating Mexico as an attractive destination for investment. In addition, the focus on sustainable investments, the
simplification of procedures and regional cooperation reinforce Mexico's competitiveness relative to the major global market
players, encouraging the participation of automotive companies in a stable environment with clear incentives and strong
government support for their expansion and growth.

Sector Outlook
The automotive sector in Mexico projects moderate growth in domestic sales for 2025, while sales of electric and plug-in
hybrid vehicles will continue to rise after registering growth of 74.7% y/y in the first ten months of 2024, with 96,796 units
sold. Although the 2025 Economic Package does not include significant new incentives for electromobility, the 65.5% y/y

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 increase in public charging stations (from 113 to 187) and the expansion of charging connectors to 42,915 strengthen the
infrastructure for the transition to more sustainable vehicles.

The industry faces challenges stemming from trade tensions between the US and China, with tariffs of 100% on Chinese
electric vehicles since May 2024, which could impact Mexican exports, which in 2024 reached USD 160.6bn. Despite trade-
related disruptions, Mexico will remain competitive in vehicle and auto parts production. the AMIA estimates 4mn vehicle
units will be produced in 2025, while the National Association of Autoparts projects a production value of USD 127.5bn in
2025, 2.42% higher than in 2024. Investment is also expected to grow, with FDI reaching USD 2.7bn in 2025 (a rise of 5.9%
y/y).

The Mexico Plan, driven by president Claudia Sheinbaum, will seek to increase vehicle production by 10% and raise the
national content per unit to 15% by 2030. The government's plans are spearheaded by the launching of Olinia, the first state-
owned manufacturer of mini electric vehicles. The government is also developing 10 electromobility projects in public
transport in various states. In addition, a 10% reduction in dependence on foreign suppliers of sensors and chips is
expected, along with the implementation of the IMMEX 4.0 programme for semiconductors, which will further boost the
national automotive industry.

Production
In 2024, Mexican manufacturing expanded its motor vehicle production to 3.99mn units, of which 3.04mn were trucks and
950,000 were automobiles. Truck production has grown at a CAGR of 4.8% over the past five years, while automobile
manufacturing has decreased at a 7.5% rate during the same period. Mexico's truck manufacturing segment is more
diversified than auto production. General Motors is the most relevant company in terms of truck production, accounting for
889,000 units, or 29% of the total. Notably, the company's output grew by 23% in 2024. GM is followed by Chrysler and Ford,
which produced 419,000 and 387,000 units, respectively. In recent years, Chrysler has considerably reduced its output from
its record 635,000 trucks in 2018. In contrast, Ford has posted exponential growth, as it only resumed its truck
manufacturing in the country in 2020. Together, these three companies account for 54% of all trucks manufactured in
Mexico. The automobile segment is much more concentrated, with five companies - Nissan, Kia, Volkswagen, BMW and
Mazda - accounting for virtually all domestic production.

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 Motor Vehicles Production

3.2
3.04
2.65
2.41
2.4 2.33 2.32

2.00 2.07
1.91 1.97 1.91
1.81 1.77
Unit mn

1.69
1.6 1.58
1.47 1.43 1.47
1.37 1.42 1.39 1.31
1.40
1.16
1.05 1.01 1.07
0.97 0.90
0.8 0.79 0.87
0.71 0.71 0.66
0.55 0.61
0.50

0
2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Autos Trucks
Sources: CEIC, INEGI

Trucks Production by Brand, 2024 Autos Production by Brand, 2024

5%
7%
5%

29 % 10 %
6%

8% 44 %
12 %

8%

14 %
9% 27 %

13 %

General Motors Chrysler Nissan Kia

Ford Motor Volkswagen Volkswagen BMW
Nissan Toyota Mazda Other
Honda Audi Sources: CEIC, INEGI
Mazda Other
Sources: CEIC, INEGI

Sales
New vehicle sales (all categories) reached 1.56mn in 2024, which was 9.8% higher than in 2023. Over the past five years,
vehicle sales have grown at a CAGR of 207%. Although Mexico is a net exporter in the automotive sector, imported vehicles

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 accounted for 63.4% of domestic sales. The foreign automobile share is slightly higher for heavier vehicles (trucks, 67.7%)
than for lighter cars (57.1%). Light vehicle sales totalled 635,900 in 2024, 6.3% more than in 2023. However, the segment's
sales have declined at a CAGR of 3.6% during the past five years. As for heavy vehicles (trucks), there were 919,352 sales
registered in 2024, having grown at a CAGR of 9% since 2019. This trend reflects changing Mexican consumer preferences
towards larger vehicles.

Automobile Sales by Manufacturing Origin

1,200,000

900,000

529,177
Unit

600,000

272,941

300,000
526,486
360,501

0
1990 1995 2000 2005 2010 2015 2020

Domestic Import
Sources: CEIC, INEGI

Truck Sales by Manufacturing Origin

1,000,000

750,000 297,056
Unit

500,000

624,761
250,000

0
2005 2010 2015 2020

Domestic Import
Sources: CEIC, INEGI

External Trade

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 Mexico is deeply integrated into global automotive value chains and it maintains a net exporter position in the sector. In
2024, the country registered a USD 95.1bn trade surplus after reaching record highs in exports (USD 160.6bn) and imports
(USD 65.5bn). While exports have grown at a CAGR of 5.8% during the past five years, imports have grown by 9.4%. Mexico's
automotive industry accounts for a whopping 26% of the country's total exports. Despite a positive performance, the sector
faces challenges from trade tensions with the US, its main trading partner. In March 2025, the White House announced a
25% levy on all imported cars and auto parts.

Vehicles External Trade

200

156.5
150
136.1
121.3
114.3
USD bn

101.7 100.7
100 95.2 95.1
86.0 90.4 88.1 87.8
77.2 78.6 75.1
70.3 72.5 68.6
62.9 60.1 61.3
50
51.7 50.2 53.1 50.8 48.3
39.5 41.9 42.8 43.8 41.6 43.1 42.7 39.2
33.8 35.7 37.3 37.2
27.927.9 27.3 28.6 32.1 25.0 26.8 32.4 33.4 32.1
22.0 24.7 28.6
17.1 16.3 18.5
9.5 10.3 9.9 10.0
0
2005 2010 2015 2020

Exports Imports Trade Balance

Sources: CEIC, BDM

Competitive Landscape
In 2024, the hierarchy of the automotive market in Mexico remained unchanged, with Nissan leading sales with 255,116
units (15.7% of the market, and growing by 5.8% y/y), followed by General Motors with 205,043 units (12.6%; 11.4% y/y).
Volkswagen consolidated its third place with 138,181 units (an 8.5% share, with remarkable growth of 21.2% y/y, while Toyota
held fourth position with 121,968 units (7.5%; 17.1% y/y) and KIA maintained fifth place with 104,384 units (6.4%; 11.7% y/y).
These top five sellers together accounted for 50.7% of the automotive market in 2024, reflecting steady growth, although
Chrysler experienced a 10.2% y/y decline, being the only brand in the top-10 with a decline in sales.

Market Shares: Top Ten Four-Wheel Motor Vehicles Sellers

Sales y/y Market

Ranking Brand 2023 Sales 2023 Share 2024 Sales 2024 Share
Change Gain/Loss (pp)

1 Nissan 241,056 16.4% 255,116 15.7% 5.8% -0.7

2 General Motors 184,051 12.5% 205,043 12.6% 11.4% 0.1

3 Volkswagen 113,975 7.7% 138,181 8.5% 21.2% 0.8

4 Toyota 104,113 7.1% 121,968 7.5% 17.1% 0.4

5 KIA 93,490 6.4% 104,384 6.4% 11.7% 0.1

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 6 Mazda 76,017 5.2% 99,797 6.1% 31.3% 1.0

7 Chrysler 71,376 4.8% 64,123 4.0% -10.2% -0.9

8 MG Motor 60,128 4.1% 60,168 3.7% 0.1% -0.4

9 Hyundai 49,757 3.4% 53,305 3.3% 7.1% -0.1

10 Ford Motor 47,968 3.3% 52,359 3.2% 9.2% 0.0

- Other 429,844 29.2% 468,375 28.9% 9.0% -0.3

- Total 1,471,775 100% 1,622,819 100% 10.3% -

Source: INEGI

Sources

Cluster Industrial, EFE, El Financiero Newspaper, Focus Online, INEGI, Tecnom, Thomson Reuters Mexico, Valona Intelligence.

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 Colombia

Sector Snapshot
Colombia ranks as the fifth-largest vehicle market and the third-largest motorcycle market in Latin America. The country's
automotive sector experienced a year of contrasts in 2024, marked by an initial decline in vehicle sales followed by a
significant recovery towards the end of the year. This turnaround was particularly evident in August, when new vehicle sales
demonstrated an 11.5% y/y increase, signalling a positive shift in consumer confidence and market dynamics. The positive
momentum in the automotive sector was reflected in the broader economy, with retail trade growth fuelled by robust sales
of vehicles and motorcycles.

The resurgence in sales towards the second half of the year was driven by the remarkable performance of the SUV and
motorcycle segments. SUVs witnessed a 24% y/y surge in sales and accounted for 53.5% of all new registrations. This
segment was spearheaded by the strong performance of Mazda, Toyota and Renault, which emerged as the leading brands
in this category. The motorcycle sector continued its growth trajectory, registering 815,601 units, a substantial 20.2% y/y
increase. Yamaha cemented its dominance in the market by leading in sales. Sales of hybrid vehicles also experienced a
remarkable 50.5% y/y increase, reaching 37,063 units between January and November 2024.

Despite these positive developments, the sector faced significant challenges. The closure of the Colmotores plant of General
Motors in April served as a stark reminder of the challenges facing the industry. However, this setback was counterbalanced
by promising developments in the realm of electric mobility. BYD and Hino unveiled the first electric articulated bus chassis
assembled in Cota, demonstrating its commitment to local production and the establishment of an assembly plant in the
country. This initiative signals a growing interest in electric vehicles and a potential shift towards sustainable transport
solutions.

Meanwhile, the market saw an influx of new entrants, such as Dfac|Dongfeng (USD 2mn investment) and GAC Motor
International, further intensifying competition and broadening the range of options available to consumers. There is also the
growing presence of Chinese brands, with 17 of the 96 brands operating in the country originating from China. This influx of
Chinese manufacturers reflects the increasing globalisation of the automotive industry and the growing importance of
emerging markets. Furthermore, the Grupo UMA inaugurated a Bajaj motorcycle assembly plant in Pereira, bolstering
domestic production, which accounts for an impressive 95% of motorcycles sold in Colombia.

Drivers and Constraints

Drivers

Foreign Invesment: DFAC|Dongfeng, the world's second-largest commercial vehicle manufacturer, officially
launched its operations in Colombia in 2024 with a USD 20mn investment through Magma Automotive. Its portfolio
includes more than 30 models of trucks, buses and vans, with diesel, petrol and electric options, complying with Euro
6 regulations. The brand seeks to lead the transition to sustainable vehicles in Colombia, focusing on key markets
such as Bogota, Medellin, Cali, Barranquilla, Bucaramanga, Antioquia, Valle del Cauca, Atlantico, Santander and
Boyaca. In the motorcycle segment, the UMA Group opened a Bajaj assembly plant in the Pereira free trade zone with
a USD 30mn investment, bringing its total investment since 2019 to USD 180mn. The 24,000 m² plant employs 850
people and it can produce up to 200,000 motorcycles per year, making it the most modern in Latin America. UMA
Group, also representing Triumph, seeks to strengthen its presence in Colombia, the third-largest motorcycle market
in the region.
SUV segment growth: The SUV segment in Colombia experienced a 24% surge in growth in 2024, with 93,921 units
sold up to November. This represents 53.5% of all new vehicle registrations. Mazda, Toyota and Renault lead this
market, with the Mazda CX-30 the best-selling model (7,127 units), followed by the Toyota Corolla Cross (6,802) and
the Renault Duster (6,025). Toyota stands out with four models in the top 10. The preference for SUVs is attributed to

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 their space, versatility and comfort, although their weight keeps CO₂ levels high. The global trend towards compact
SUVs has also influenced the Colombian market, displacing traditional cars.
BYD Public Tender: BYD unveiled the first electric articulated bus chassis assembled in Colombia at the Hino plant in
Cota, Cundinamarca, with plans to participate in the TransMilenio tender in January 2025. The company is seeking
government agreements to reduce taxes and boost the local automotive industry, with Colombian suppliers
interested. If realised, Colombia would have the world's largest fleet of electric bi-articulated buses. BYD already
operates 1,500 electric buses in the country, delivers electric trucks to Pepsi and Coca-Cola, and plans an electric
vehicle assembly plant in Colombia.
Constraints

Breakdown of Trade Relations: Andemos expressed its concern about the unilateral decision of the Colombian
government to terminate tariff preferences with Brazil in the automotive sector, without dialogue in the ACE 72
Commission. The association warns that this measure could provoke retaliation from Brazil, increase vehicle prices
and affect both consumers and local manufacturers, preventing the renewal of the vehicle fleet. It also warns about
the deterioration of trade relations with Mercosur and possible impacts on future negotiations. Andemos urged the
government to reconsider the decision and encourage dialogue to ensure the sustainability and competitiveness of
the Colombian automotive industry.
Colmotores Closure Problem: The closure of the General Motors plant in Bogota was mainly due to competitive
pressure from free trade agreements with major producers such as the US, Europe and South Korea. The plant was
operating at 9% of capacity, producing 11,000 units a year, far short of the 40,000 needed to be financially viable.
Global factors such as the pandemic and rising interest rates also affected the industry, while competition with
markets that produce millions of vehicles annually was unsustainable.
Insufficient charging infrastructure and limited autonomy: The adoption of electric vehicles in Colombia faces a
crucial challenge due to insufficient charging infrastructure. Despite a 2019 target of at least five charging stations in
every municipality, by November 2023 there were only 218 charging points concentrated in Bogotá, Medellín and Cali.
This number is insufficient for a growing fleet and it falls 40% short of the International Energy Agency's standards
for the electric vehicle fleet size. In addition, the limited range of the vehicles, which varies between 200 km and 300
km per charge, makes long journeys difficult, making the need for more chargers on public and inter-municipal roads
evident, according to the general manager of BYD Colombia.
High costs and environmental problems associated with batteries: The high initial cost of electric vehicles,
influenced by the price of batteries, is a significant barrier for consumers. For example, installing a home charging
point can cost around COP 3mn, and charging a 30 kW battery can cost COP 19,000. In addition, the environmental
impact of batteries is considerable, as their production emits 70% more CO2 than internal combustion vehicles, as
Volvo revealed when comparing its C40 Recharge and XC40 models. The extraction of materials such as lithium and
cobalt exacerbates this problem, suggesting that alternatives such as green hydrogen could be a more sustainable
option in the long term.

Market Opportunities
Expansion of the electric and hybrid vehicle market

The 65% growth in electric and hybrid vehicle sales in 2024, with 51,891 units sold, highlights a key opportunity for brands.
Factors such as the high cost of petrol, the exemption from the ‘pico y placa’ - a traffic restriction that limits the mobility of
certain vehicles based on the last digit of their licence plate number - and lower taxes are driving this trend. The participation
of brands such as BYD, Toyota and Mazda, along with possible regulatory policies such as the US Environmental Protection
Agency's requirements to monitor battery life, creates a favourable environment for innovation and differentiation in the
Colombian market.

Digitisation of the Automotive Sector

Digitalisation emerges as a crucial opportunity to grow vehicle sales, optimising the shopping experience and expanding
market reach. Companies such as WCAR, which doubled its sales thanks to its digital platform, demonstrate the potential of
technological tools, even allowing 30% of its sales to be made without physical contact with the vehicle. This approach
facilitates transparency, access to finance and expansion of the sector, positioning digitalisation as a growth driver for 2025.

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 Sector Outlook
Colombia’s automotive sector began 2025 with a strong performance, recording 31,513 units sold in the first two months of
the year, 15.8% higher compared to the same period in 2024. This positive start continues the recovery trend seen at the end
of 2024. ANDI (the National Association of Industrialists) and FENALCO (National Federation of Businessmen) project an
optimistic target of 220,000 vehicle registrations by the end of 2025, bringing the sector closer to pre-pandemic levels.
Eduardo Visbal, vice president of FENALCO, underscored the importance of private sector initiatives such as the Automotive
Saloon (Colombia’s premier automotive exhibition showcasing new car models, accessories and services), which helped to
invigorate the market during a challenging year. Looking ahead to 2025, the sector aims to consolidate this growth,
supported by government policies that promote the modernisation of the vehicle fleet and access to cleaner technologies.
As for the motorcycle sector, the market is projected to continue expanding due to the high demand for affordable mobility.
However, the segment faces challenges in terms of sustainability and road safety that will shape regulatory priorities.

Vehicle Registration
In 2024, 201,219 new vehicles were registered, marking a 7.7% y/y increase. This growth was primarily driven by a significant
surge in electric vehicle sales, which soared by 148% y/y, alongside a 56% y/y increase in hybrid vehicle sales. Additionally,
segments such as passenger commercial vehicles (45.1% y/y), taxis and cargo commercial vehicles (44.6% y/y), and utility
vehicles (42.8% y/y) performed notably well, while cities such as Ibagué (229% y/y), Madrid (121.7% y/y) and Cartagena
(51.8% y/y) led sales growth. The motorcycle segment performed extraordinarily well, with registered units increasing by
19.7%. The 833,178 motorcycles registered in 2024 constituted an all-time high for the segment.

Vehicle Registration by Type

1,200,000 300,000
1,134,636 1,123,230

1,000,000 270,000
263,684 262,600
256,662 910,809 926,129
253,698 892,639
250,497
822,617 833,178
799,994
Unit
Unit

800,000 782,381 238,238 240,000

741,819
722,977
696,360

612,086
600,000 574,481 210,000
553,361 201,219
527,237
499,692
188,665 186,826
400,000 180,000
2016 2018 2020 2022 2024

New Vehicles (RHS) Used Vehicles Motorcycles

Sources: CEIC, ANDEMOS

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 Vehicle Registration by Brand, 2023 Motorcycles Registration by Brand, 2023

5%
14 %
8% 19 %
24 %

8%

14 %

3%
10 %
17 %
4%

5%
13 %
6% 15 %

8% 9% 17 %

Renault Toyota Yamaha Bajaj Akt

Chevrolet Mazda Suzuki Honda Tvs
Kia Suzuki Victory Other
Nissan Volkswagen Sources: CEIC, ANDEMOS
Ford Other
Sources: CEIC, ANDEMOS

External Trade
Colombia is a net importer of vehicles. In 2024, the country's trade deficit stood at USD 4.4bn, as exports amounted to a
mere USD 482mn, while imports reached 4.9bn.

Vehicles External Trade

8,000

5,992 6,282
5,220 4,877
4,669 4,755
4,122 4,287
4,000 3,732 3,594 3,436

649 634
USD mn

550 501 539 542 332 318 397 529 482

0

-3,193 -3,052 -3,104

-3,621 -3,638
-4,000 -4,351 -4,226 -4,395
-4,586
-5,442
-5,885

-8,000
2014 2016 2018 2020 2022 2024

Exports Imports Trade Balance

Sources: CEIC, DANE

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 Competitive Landscape
In 2024, the Colombian automotive sector witnessed a notable shift in its leadership compared to 2023. Toyota positioned
itself as the leading brand, with a 13.4% share and a 4.2% growth in sales, displacing Renault, which led in 2023 but fell to
second place with a 12.6% share following a 4.1% decrease in its sales. Kia rose from fifth to third place, thanks to an
impressive 54% increase in sales, with a 12.1% share. Chevrolet maintained stable growth of 11.5%, securing fourth place
with 9.7% of the market. In contrast, Mazda, which occupied third place in 2023, dropped to fifth position following a 24.6%
decline in sales, leaving it with an 8.9% share. Collectively, these five brands dominated the market, with 56.7% of the total
share, consolidating themselves as the main players in the Colombian automotive sector in 2024.

The motorcycle sector was led by Yamaha, AKT, Bajaj, Suzuki and Honda, which maintained their dominant presence and
established themselves as the preferred brands among consumers. Yamaha maintained its leadership with a 19% market
share following 23.6% y/y growth in sales. AKT surpassed Bajaj for second place, with a 17% market share, while Bajaj
reduced its share by 1.2pp to 15.5% after its sales increased by only 10.9% y/y, compared to an industry-wide growth rate of
19.7% y/y. Suzuki and Honda registered outstanding performances, with 25.7% y/y and 34.2% y/y sales growth, respectively.
Collectively, these five brands accounted for 77.2% of the sector's sales.

Market Shares: Top Ten Four-Wheel Motor Vehicles Sellers

Sales y/y Market

Ranking Brand 2023 Sales 2023 Share 2024 Sales 2024 Share
Change Gain/Loss (pp)
1 Toyota 25,940 13.9% 27,023 13.4% 4.2% -0.5
2 Renault 26,417 14.1% 25,339 12.6% -4.1% -1.5
3 Kia 15,746 8.4% 24,251 12.1% 54.0% 3.6
4 Chevrolet 17,583 9.4% 19,605 9.7% 11.5% 0.3
5 Mazda 23,838 12.8% 17,968 8.9% -24.6% -3.8
6 Nissan 9,741 5.2% 12,211 6.1% 25.4% 0.9
7 Suzuki 10,389 5.6% 10,814 5.4% 4.1% -0.2
8 Volkswagen 6,735 3.6% 8,220 4.1% 22.0% 0.5
9 Hyundai 5,186 2.8% 7,206 3.6% 39.0% 0.8
10 Ford 6,476 3.5% 7,128 3.5% 10.1% 0.1
- Other 38,775 20.8% 41,454 20.6% 6.9% -0.2
- Total 186,826 100% 201,219 100% 7.7% -
Source: ANDEMOS

Market Shares: Top Ten Motorcyles Sellers

Sales y/y Market

Ranking Brand 2023 Sales 2023 Share 2024 Sales 2024 Share
Change Gain/Loss (pp)

1 Yamaha 128,011 18.4% 158,207 19.0% 23.6% 0.6

2 AKT 113,862 16.4% 141,594 17.0% 24.4% 0.6

3 Bajaj 116,476 16.7% 129,168 15.5% 10.9% -1.2

4 Suzuki 98,924 14.2% 124,369 14.9% 25.7% 0.7

5 Honda 67,139 9.6% 90,075 10.8% 34.2% 1.2

6 Tvs 53,705 7.7% 64,956 7.8% 20.9% 0.1

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 7 Victory 53,503 7.7% 46,205 5.5% -13.6% -2.1

8 Hero 28,411 4.1% 38,522 4.6% 35.6% 0.5

9 KTM 5,757 0.8% 7,031 0.8% 22.1% 0.0

10 Kymco 6,242 0.9% 5,702 0.7% -8.7% -0.2

- Other 24,143 3.5% 27,349 3.3% 13.3% -0.2

- Total 696,173 100% 833,178 100% 19.7% -

Source: ANDEMOS

Sources

America-Retail, ANDEMOS, ANDI, FENALCO, Infobae Newspaper, La República Newspaper, MATPITS, Portafolio Newspaper,
Publimotos.

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 Argentina

Sector Snapshot
The Argentinian automotive sector faced a challenging year in 2024, reflected in a 17.1% y/y drop in national vehicle
production, according to the Association of Automotive Manufacturers (ADEFA). Total production reached 506,571 units,
showing a significant decline, although in December 38,018 units were recorded, with growth of 2.8% y/y, although 29.2%
less than in the previous month. Despite the drop in production, sales grew by 1.1% y/y to 411,406 units in 2024. While
exports remained relatively steady, imports increased by 9.3% y/y, resulting in a USD 2.1bn trade deficit, the highest since
2018.

Some government policies, such as the artificially low exchange rate, while seeking to control inflation, have an important
effect over sectors such as automotive, where competitiveness may be compromised without structural reforms. Although
the current picture is complex, there are some signs of recovery. The sector was boosted by strategic moves, such as BBVA's
purchase of 50% of Stellantis' FCA Financial Company, adding to its stake in Volkswagen's financial company, in a deal valued
at USD 13mn. This joint venture reinforces the bank's commitment to Argentina, facilitating the financing of new cars and
strengthening in the market the position of Stellantis, the manufacturer of Fiat, Peugeot, Jeep and RAM. Secured lending was
one of the few segments that took off during the recession, with a total of ARS 2.9tn at the end of November, an increase of
212.6% y/y.

The outlook for 2025 is considerably more optimistic, with expectations of 5.5% real terms GDP growth driven by investment
and the reactivation of private consumption, according to BBVA Research. Foreign investment and strategic alliances
continue to support the sector, while the industry faces the challenge of adapting to a competitive global market, the
transition to electric vehicles and the volatility of the local economy.

Drivers and Constraints

Drivers

Argentina to Overhaul Car Tax System: The Argentinian government, under the administration of president Javier
Milei, will increase the threshold from which the 20% internal tax on new vehicles is levied, currently applied to
models exceeding ARS 14.7mn. This change will exempt small and medium-sized vehicles from the first tax bracket by
significantly raising the threshold to ARS 75mn. Furthermore, the tax levy for cars exceeding this amount will be
reduced from 20% to 18%, decreasing its impact on the final price. The updating of these values will be monthly,
adjusting to the Wholesale Price Index (WPI) of INDEC, preventing inflation from quickly raising prices to the tax level.
The measure seeks to ease the tax burden on low-end and mid-range cars, maintaining tax revenues, but
incentivising sales of more accessible models, while pick-up trucks will remain exempt as they are considered
commercial vehicles.
Growth Despite Challenges: Despite high production costs in dollars and domestic inflation, the Argentinian
automotive sector projects a 20% increase in sales for 2025, driven by greater availability of financing and the recent
elimination of the PAIS tax on imports, which has already led to price reductions on some brands. Stellantis'
investment of USD 385mn in its Córdoba plant for the production of three new pickup models will increase
production capacity by between 10% and 15%, consolidating Argentina's position as a regional centre for automotive
production. Although challenges persist, such as exchange rate volatility in Brazil and high local costs, the estimated
growth in sales (up to 500,000 units) and the increase in production (up to 160,000 vehicles) reflect an optimistic
outlook for the industry, attracting investment and strengthening the market's competitiveness.

Constraints

Navigating Economic Challenges: The Argentinian automotive sector faces a latent problem that became evident in
early 2024 when reduced availability of US dollars led to the postponement of activities in several factories due to a
lack of supplies and the accumulation of debts with external suppliers. The delay in updating internal taxes

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 temporarily paralysed the invoicing of new vehicles, affecting dealerships and consumers. Although tools such as the
Bopreal Bond allowed some car manufacturers, such as Toyota Argentina, to resume operations, there are still risks
that this situation will be repeated in 2025 if sustainable solutions are not achieved, which could again impact the
sector's production, sales and exports.
Asian Brands Challenge Argentina's Auto Industry: The automotive industry in Argentina faces intense
competition, especially with Asian brands, including Chinese and Thai, which constantly pose a challenge with
aggressive pricing and cost optimisation. In this context, companies such as Toyota have had to redouble their efforts
to maintain their competitiveness, betting on operational efficiency and continuous improvement, while facing
challenges such as accumulated debt from import restrictions and pressure from international markets. Despite
these difficulties, Toyota has managed to sustain its leadership, backed by its parent company in Japan, and it
continues to invest in the country, as demonstrated by the recent production of a new model at its Zárate plant.

Market Opportunities
Tesla to Argentina: Boosting the EV Market

The imminent arrival of Tesla in Argentina in 2025 represents a significant market opportunity for the local automotive
sector, especially in the electric vehicle (EV) segment. The reform announced by the Ministry of Deregulation and State
Transformation, which will allow for the automatic homologation of vehicles certified in the US and Europe, will significantly
reduce import times, facilitating the rapid commercialisation of Tesla cars. Although prices are estimated to double those in
the US due to local taxes, Tesla's presence will promote the adoption of sustainable technologies, creating opportunities for
the development of charging infrastructure, specialised after-sales services and increased competition in the electric car
market. The operation of Argentesla as a private importer, following the model of Brazil and Uruguay, will also incentivise
new investments and strengthen the supply of premium electric vehicles in Argentina.

Argentina Cuts Tariffs to Boost Trade

The reduction of tariffs on 89 items of finished goods and inputs, announced by the Argentinian Ministry of Economy,
represents a market opportunity to boost the country's competitiveness and trade openness. Although its immediate impact
on consumer prices may be limited, this measure lays the foundation for deeper integration with international markets,
benefiting sectors such as motor vehicles and tyres, where the progressive reduction of tariffs will encourage greater
commercial dynamism and facilitate access to key inputs. As these adjustments are implemented, companies will have the
opportunity to optimise their costs, expand their offerings and attract new investment, consolidating Argentina as a
competitive player in the region and generating growth opportunities for the automotive industry and other productive
sectors.

Argentina Eases Local Content Rules for Automakers

The regulatory change promoted by the government of Javier Milei, which reduces the local value-added requirement in the
automotive industry, represents a significant opportunity for automakers operating in Argentina. With a new minimum of
just 5% for the activity as a whole and 2% per imported model, companies will be able to increase the import of vehicles and
components, optimising costs and expanding their offering in the local market. While this measure generates concern
among auto parts SMEs, which fear losing competitiveness against the increase in imported finished products, it also creates
a favourable scenario for international automakers seeking to expand their presence in Argentina, attract investment and
offer more competitive prices, taking advantage of a more flexible regulatory framework open to global trade.

Sector Outlook
According to ADEFA, the Argentinian automotive sector projects significant growth in 2025, with an estimated production of
545,000 vehicles, representing a 7% to 9% increase compared to 2024. Exports are also forecast to rise, reaching
approximately 324,000 units, an 8% increase, while domestic sales could exceed 500,000 units, reflecting growth of more

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 than 12%. This optimistic outlook is partly due to the strategic measures implemented by the government, which have
boosted the sector and led to investments of USD 1.15bn, in addition to contributing to an increase in tax revenue. Also, the
automotive sector projects a 20% increase in sales for 2025, driven by greater availability of financing and the recent
elimination of the PAIS tax on imports, which has already led to price reductions in some brands.

Production
In 2024, motor vehicle production declined by 17.1% y/y to 506,571 units. Lower production is part of a larger manufacturing
industry-wide crisis in the country amid tough macroeconomic conditions. The country's industrial production index for
manufacturing contracted by 9.4% y/y in 2024, with the automotive industry declining by an even greater 11.3% y/y.

Motor Vehicles Production

1,000,000 80
69.0

53.5
791,007.0
750,000 35.2 716,540.0 40
22.8 26.0
597,086.0 15.7 617,329.0 610,715.0
6.4 544,647.0 526,657.0 536,893.0
3.5
Unit

500,000 472,776.0 -1.4 0

%
432,347.0 -7.8 434,753.0
-14.1 -14.7 -17.1
-18.3
-22.0
-30.9 319,755.0 314,787.0
260,420.0 257,187.0
250,000 234,493.0 -40
169,640.0

0 -80
2005 2010 2015 2020

Production y/y change, %

Sources: CEIC, ADEFA

Sales
Motor vehicle sales stood at 411,406 units in 2024, 1.1% higher than the 406,940 units sold in 2023. The sector's sales have
grown at a CAGR of 2% during the past five years. However, sales remain 57.3% lower compared to the peak value of 963,917
units observed in 2013.

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 Motor Vehicles Sales

1,200,000 120
100.4

963,917.0
900,000 883,350.0 883,802.0 60
43.3
29.1 721,411.0
14.5 698,299.0 16.1
611,770.0 613,848.0 6.9 12.5 8.2
1.1
Unit

600,000 -6.0 0

%
-16.0
487,142.0 -22.9
460,974.0
-36.3 411,406.0
372,474.0
-53.5 311,964.0 312,789.0
300,000 -60
176,700.0
82,135.0

0 -120
2005 2010 2015 2020

Sales y/y change, %

Sources: CEIC, ADEFA

External Trade
Argentina is a net importer in the vehicles sector. The country's exports totalled USD 6.87bn in 2024, which was USD 63.9mn
less than in 2023. However, imports increased by 9.3% to USD 9bn, which explains the growing trade deficit that amounted to
USD 2.1bn, the highest since 2018.

Vehicles External Trade

16
14.4
12.9 13.2
12.0
11.0
10.1 9.6 10.1 9.6
9.4 8.8 8.3 9.0
8 8.0 7.9 8.2
7.0 6.5 6.2 6.4 6.9
5.8 6.0
5.3 5.3 5.0 5.8 5.6
4.6
4.2
3.1
1.6 1.5
USD bn

0 -0.1 -0.4 -0.4 -0.4

-1.0 -1.4 -1.3 -1.7 -1.3 -0.7 -1.1 -1.3 -2.1
-2.2 -2.9 -2.4 -2.3
-2.9
-4.3 -4.6 -4.8
-7.4
-8

-16
2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Exports Imports Trade Balance

Sources: CEIC, INDEC

Competitive Landscape

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 The Argentinian automotive sector recorded a slight increase of 1.1% y/y in total vehicle sales in 2024, from 406,940 to
411,406 units. This growth, although moderate, is partly explained by the rebound of brands such as Volkswagen (13.9% y/y),
Citroën (16.7% y/y) and Jeep (44.2% y/y), which launched competitive models and strengthened their commercial strategies.
However, leaders such as Toyota (-9.4% y/y) and Renault (-31.2% y/y) suffered declines, which limited greater growth. The
increase in the "Others" segment (31.5% y/y) also contributed to the rise, demonstrating greater diversity of supply in the
market.

In heavy vehicles, the market grew thanks to the strong performance of Mercedes-Benz (17.3% y/y), Volkswagen (191.3% y/y)
and Foton (288.8% y/y), driven by fleet renewal and increased demand in logistics. Despite declines in IVECO, Scania and
Agrale, growth in emerging brands such as Isuzu (60.4% y/y) and DFM (50% y/y) helped maintain stability, contributing to the
slight overall increase in sales in the Argentinian automotive sector in 2024.

Market Shares: Top Ten Four-Wheel Motor Vehicles Sellers - Light Vehicles

Sales y/y Market

Ranking Brand 2023 Sales 2023 Share 2024 Sales 2024 Share
Change Gain/Loss (pp)
1 Toyota 93,591 22.0% 84,756 21.7% -9.4% -0.3
2 Volkswagen 56,608 13.3% 64,449 16.5% 13.9% 3.2
3 Renault 51,769 12.2% 35,594 9.1% -31.2% -3.1
4 Ford 37,547 8.8% 35,611 9.1% -5.2% 0.3
5 Fiat 55,553 13.1% 47,320 12.1% -14.8% -1.0
6 Chevrolet 30,618 7.2% 23,592 6.0% -22.9% -1.2
7 Peugeot 41,891 9.9% 37,102 9.5% -11.4% -0.4
8 Nissan 19,482 4.6% 12,817 3.3% -34.2% -1.3
9 Citroen 12,251 2.9% 14,299 3.7% 16.7% 0.8
10 Jeep 8,965 2.1% 12,925 3.3% 44.2% 1.2
- Other 16,728 3.9% 22,002 5.6% 31.5% 1.7
- Total 425,003 100% 390,467 100% -8.1% -
Source: ACARA

Market Shares: Top Ten Four-Wheel Motor Vehicles Sellers - Heavy Vehicles

Sales y/y Market

Ranking Brand 2023 Sales 2023 Share 2024 Sales 2024 Share
Change Gain/Loss (pp)
1 Mercedez Benz 5,238 37.0% 6,146 41.7% 17.3% 4.7
2 IVECO 5,366 37.9% 4,277 29.0% -20.3% -8.9

3 Volkswagen 507 3.6% 1,477 10.0% 191.3% 6.4

4 Scania 1,331 9.4% 1,060 7.2% -20.4% -2.2

5 Agrale 681 4.8% 499 3.4% -26.7% -1.4

6 Foton 116 0.8% 451 3.1% 288.8% 2.2

7 Volvo 408 2.9% 434 2.9% 6.4% 0.1

8 Hino 284 2.0% 123 0.8% -56.7% -1.2

9 Isuzu 53 0.4% 85 0.6% 60.4% 0.2

10 DFM 18 0.1% 27 0.2% 50.0% 0.1

- Other 163 1.2% 153 1.0% -6.1% -0.1

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 - Total 14,165 100% 14,732 100% 4.0% -

Source: ACARA

Sources

ACARA, ADAFEA, Agrolatam, America-Retail, Clarín, El Cronista, Infocielo, iProfesional, Somos Jujuy.

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 Ecuador

Sector Snapshot
Ecuador´s automotive segment suffered a substantial decline. In 2024, new vehicle sales in Ecuador totalled 108,266 units,
reflecting an 18.2% y/y drop, according to data from the Internal Revenue Service (SRI), the tax authority of Ecuador. The light
vehicle segment was the most affected, with 98,042 units sold, representing a 19.5% y/y decrease, while heavy vehicles
recorded a smaller drop of 4% y/y, with 10,224 units sold. These figures show a significant contraction of the Ecuadorian
automotive market during the year.

According to Genaro Baldeón, executive president of the Ecuadorian Automotive Companies Association (Aeade), lower sales
can be attributed to the economic and social crisis, political uncertainty, security problems and the energy crisis, which
affected consumer confidence. Additionally, the contraction of credit and lower liquidity in both companies and the State
contributed to the reduction in demand. Another determining factor was the sector's high tax burden, as the purchase of a
new vehicle involves the payment of up to 23 taxes, including the increase in VAT, ISD and new security contributions, which
directly impacted prices and accessibility.

The hybrid and electric vehicle segment underwent a mixed performance. Hybrid vehicle sales grew by 21.8% y/y, to 12,726
units, while electric vehicle sales fell by 2.5% y/y, with 1,778 units sold. Despite the aggregate growth in these models, they
represent only 13% of the Ecuadorian automotive market. Baldeón highlighted that a greater supply of models – currently
180 options – with better technology and equipment has boosted consumer interest, facilitating the adoption of this type of
vehicle in the country.

Since 2015, imported vehicles have surpassed those assembled locally in Ecuador, a trend that was accentuated by the
closure of the General Motors (GM) plant, significantly affecting the automotive industry. GM's decision to close its assembly
plants in Colombia and Ecuador has generated uncertainty around the sector's future, although some companies are
seeking to capitalise on the opportunity. Ciauto, for example, aims to gain market share in the truck and SUV segment, while
the industry explores strategies to improve profitability and competitiveness, including diversification with new business
models and services such as vehicle armouring.

Drivers and Constraints

Drivers

Electric Mobility: Ecuador is heavily betting on electric mobility, reflected by relevant sales growth in 2024. Despite
challenges, such as the energy crisis, the market has responded positively to accessible and efficient models such as
the BYD Seagull EV, the Yuan Pro EV and the BYD Song Plus hybrid. The adoption of these vehicles responds not only
to an interest in lowering operating costs and concerns over environmental sustainability, but also to the growing
supply of models with advanced technology, such as the V2L system. With BYD leading the segment, Ecuador is
moving towards an energy transition that seeks to consolidate electromobility as a viable and sustainable alternative
in its vehicle fleet.
Ecuador's Auto Shift: The Ecuadorian automotive sector is in a moment of change and adjustment, with
opportunities to adapt and evolve. Although 2024 presented challenges and 2025 is projected to maintain a similar
dynamic, the commercial environment has begun to offer competitive advantages. Reduced tariffs for Chinese
vehicles and the elimination of tariffs for cars from the EU open the door to greater market diversification, boosting
competitiveness and offering new options for consumers. Although sales have not yet grown at the expected pace,
the industry has the potential to capitalise on these changes through more accessible financing strategies and cost
optimisation. Despite the heavy tax burden on prices, free trade agreements allow a more favourable environment to
attract new investors and strengthen vehicle supply.

Constraints

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 Charging Infrastructure: The lack of rapid charging stations limits the convenience of using EVs, especially for those
who travel long distances or do not have access to a stable charging source. Additionally, spare parts availability and
specialised technical services are limited, leading to long waiting times in case of mechanical or electronic damage,
affecting users' perception of reliability and maintenance. Added to this is the high cost of electric vehicle insurance,
which can represent up to 10% of the car's value, discouraging consumers. Although Ecuador is advancing in the
transition towards electromobility, infrastructure and associated costs remain significant barriers that must be
addressed to ensure a sustainable and efficient adoption of these vehicles.
High tax load: The drop in vehicle sales in Ecuador in 2024 has been heavily influenced by the increase in the tax
burden, which has significantly raised the final price of automobiles. From the second half of 2023, the market
contraction became evident, with a brief rebound in March 2024, when many consumers brought forward their
purchases to avoid the impact of the VAT increase, the Foreign Currency Outflow Tax (ISD) and changes to the Special
Consumption Tax (ICE), which came into effect in April. The VAT increased the final price of vehicles, the ISD taxed
money transfers from abroad, and the ICE, a tax applied to goods considered luxury or with environmental impact,
further raised vehicle costs, affecting demand. The president of the AEADE, Genaro Baldeón, has pointed out that the
combination of 23 taxes applied to vehicle purchases discourages demand and affects the sector's performance. The
high tax burden, coupled with economic, political and social uncertainty, has reduced consumer liquidity and limited
access to credit, further hindering the purchase of new vehicles. Aside from new sales taxes, the Ecuadorian
government has proposed a new tax on used vehicles transfers, as part of an urgent law sent to the National
Assembly, replacing the increase in vehicle property tax that generated criticism. The measure aims to formalise the
buying and selling of second-hand vehicles, establishing specific regulations for the tax payment. It is estimated that
around 300,000 people will be affected by this tax, which will be applied to the sale price of vehicles and will vary
depending on their type and characteristics. The Ecuadorian Automotive Industry Chamber argues that the
government should strengthen controls on existing taxes instead of introducing new ones, which would allow for
increased revenue without negatively impacting consumers. While the proposal is debated in the Assembly, its impact
on the used vehicle market and buyers' finances remains a cause for concern and discussion.

Market Opportunities
Despite the reconfiguration that the automotive industry in Ecuador is undergoing, with the closure of the General Motors
(GM) assembly plant in Quito, which represented 51% of national production, the market continues to attract some
investments. While GM and other brands adjust their strategies and reduce operations, manufacturers such as Hyundai and
Kia are betting on consolidating their presence in the country with production and sustainable mobility initiatives. Hyundai
has confirmed that it will maintain local assembly, with a manufacturing plan of more than 2,000 units annually of the Creta
model, backed by a USD 15mn investment and the creation of 500 jobs. For its part, Kia has launched "Kia E-Ground" in
Quito, a sustainable mobility experience centre where visitors can witness first-hand the technological and energy solutions
that the brand is promoting.

Ecuador is moving towards sustainable mobility with a transforming market and new opportunities for electromobility. Uber
Green has arrived in Quito, offering rides in electric vehicles, while Laboratorios Bagó planned for 30% of its vehicle
acquisitions to be hybrid or electric, intending to reach a 75% clean fleet by 2030. Additionally, Tetra Pak, the Municipality of
Quito, and EMGIRS EP have delivered the first electric motorcycle to recyclers in the south of the city, promoting ecological
transport solutions in various sectors. With a growing interest in charging infrastructure and corporate environmental
policies, Ecuador represents a key opportunity for companies seeking to invest in electric mobility, fleet optimisation and
sustainable vehicle financing.

Sector Outlook
For 2025, according to Genaro Baldeón, executive president of the AEADE, the Ecuadorian automotive market is expected to
maintain a similar dynamic to that of 2024, with efforts by companies to boost sales and expand the available supply.
However, recovery will largely depend on political and economic factors, such as the country's stability, access to credit and
liquidity conditions in the private and public sectors. A key challenge will continue to be the high tax burden, which raises the
final price of vehicles by between 40% and 60%, directly affecting consumer demand and purchasing decisions.

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 Vehicle Registration
In 2023, Ecuador reached 3.07mn registered vehicles, following 6.4% y/y growth. Motorcycles and automobiles are the most
common types of vehicle, each accounting for 28% of the total. The market has fierce competition among brands, with
Chevrolet being the only company with a market share that surpasses 20% in terms of vehicle registration. Notably, all
vehicle types registered a decrease in sales in 2024, highlighting the sector's difficulties.

Vehicle Registration

3.2 45
40.6
2.9 3.1

2.5
2.4
2.4
2.2 2.3 2.4 30
2.1
21.3 1.9
1.7 1.8
Unit mn

1.6 13.6 1.5 1.6 13.6 15

%
10.8 10.4 9.9
9.0 1.2 8.8
6.8 6.8 7.4 7.4 6.4
5.7 4.7
3.4 1.0 0.9 0.9 1.9 2.1
0.9 0.9
0.8 0.8 0
0.6 0.6 0.7 0.7 -3.8
-4.3 -5.1

0 -15
2000 2005 2010 2015 2020

Vehicles y/y change, %

Sources: CEIC, INEC

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 Motor Vehicles Registered by Type, 2023 Motor Vehicles Registered by Brand, 2023

4%

4%
24 %
28 %
16 %

53 % 6%

6%

19 % 6%

5%
28 %

Motorcycles Automobile Chevrolet Kia

Jeep Light Truck Suzuki Hyundai
Truck Other Toyota Other
Sources: CEIC, INEC Sources: CEIC, INEC

Sales by Type of Vehicle

Type Jan - Nov 2023 Jan - Nov 2024 Y/Y Change

SUV 57,882 47,266 -18.3%

Cars 28,738 19,652 -31.6%

Pickup Trucks 22,211 19,054 -14.2%

Trucks 8,981 8,556 -4.7%

Vans 4,621 4,299 -7.0%

Buses 902 732 -18.8%

Total 123,335 99,559 -19.3%

Source: AEADE

External Trade
Ecuador is a net exporter in the vehicles sector. Since General Motors' plant closure in 2015, exports have been negligible. As
the country has not been able to fulfil domestic demand with local production, its trade deficit has been constantly
expanding. In 2024, imports amounted to USD 2.1bn following a deep contraction of 24.6% y/y, reflecting ongoing sales
difficulties in the domestic market.

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 Vehicles External Trade

4,000

2,775
2,361 2,269 2,314
2,007 2,175 2,044 2,104
2,000 1,878
1,500 1,591 1,537
1,190 1,305
932 744 849
634
341 379 408 252 352 391 490 136
USD mn

100 53 119 72 167 121 91 25 18 35 38 30 9 8 4 7

0
-534 -625 -777
-880 -1,064
-1,445 -1,276
-1,600 -1,778
-2,009 -1,860
-2,000 -2,054 -2,035 -2,097
-2,280
-2,786

-4,000
2005 2010 2015 2020

Exports Imports External Trade

Sources: CEIC, BCE

Competitive Landscape
The three leading brands in vehicle sales are Kia (19%), Chevrolet (18.3%), and Toyota (7.6%), accounting for a combined 45%
of the local market. The commercial vehicle segment is much more dominated by Chinese companies, with seven of the top
ten selling brands. Hino (22.7%), Sinotruk (12.4%) and Chevrolet (11.3%) are the top three sellers.

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 Light Vehicle Sales, Nov 2024 Commercial Vehicle Sales, Nov 2024

19.0 % 21.8 % 22.7 %

26.2 %

3.0 %

2.4 % 3.2 %

2.8 % 3.4 %
18.3 % 12.4 %
4.3 % 3.4 %

4.5 % 3.6 %

4.9 % 7.6 % 5.1 %

11.3 %
5.0 % 5.0 % 10.1 %

Kia Chevrolet Hino Sinotruk

Toyota Chery Chevrolet JAC
Hyundai Suzuki KYC Dongfeng
Renault GWM Foton Shineray
Mazda Changan Hyundai Shacman
Other Other
Sources: CEIC, AEADE Sources: CEIC, AEADE

Sources

AEADA, America Economia, El Comercio Newspaper, El Oriente Newspaper, El Universo Newspaper, Expreso, Portafolio
Newspaper, Radio Pichincha, Valona Intelligence, Vistazo.

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 Abbreviations

ADEFA Argentinian Association of Automotive Manufacturers

AEADE Ecuadorian Automotive Companies Association

AMIA Mexican Automotive Industry Association

ANDEMOS Colombian National Association of Sustainable Mobility

ANDI Colombian National Association of Industrialists

Brazilian National Association of Motor Vehicle

ANFAVEA
Manufacturers

ARS Argentine Peso

BRL Brazilian Real

CAGR Compounded Annual Growth Rate

COP Colombian Peso

EV Electric Vehicle

FENABRAVE Brazilian National Federation of Motor Vehicle Distribution

FENALCO Colombian National Federation of Businessmen

INEGI Mexican National Institute of Statistics and Geography

MXN Mexican Peso

USD United States Dollar

USMCA United States - Mexico - Canada Agreement

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