Car sales in Latin America skyrocket


Esperanza Tello couldn’t resist.

When a salesman at the International Chevrolet dealership here took $500 off the sticker price, then threw in easy credit, free insurance and the title fee, she took the plunge. Tello recently became the proud owner of a new Chevy Spark GT. It’s the first new car that the 41-year-old elementary school teacher has owned.

“I’ve wanted one for a long time, but the down payment was always too high. Here I found the terms were just what I needed,” said Tello, as she drove her sporty red $14,000 compact off the lot. “This will help me with my second job, going around to little towns selling perfumes and cosmetics.”

Vehicle sales growth in China, now the world’s No. 1 car market, is grabbing headlines. But Latin American countries including Brazil, Peru, Argentina and Colombia also are seeing car sales skyrocket. A rapidly expanding middle class and easier credit are feeding the regionwide boom.


“Before, buying a new car was just for the upper class,” office manager Carlos Arturo Pena said as he kicked tires at the Chevy dealership in Bogota. “Now, it’s much more within common people’s budgets.”

In Brazil, the region’s top market, more than 3.5 million cars and light trucks were sold last year — up 86% compared with 2006. Its economy is growing fast and wages are rising.

“In a macroeconomic sense, Brazil has greater stability, more per capita income, more jobs and more credit than before,” said a spokesman for Brazil’s largest car manufacturers association, ANFAVEA. “And consumer confidence is rising, so people are more likely to join the ranks of car owners.”

In percentage terms, car sales are even more impressive in Peru. The market is tiny, with just 116,000 cars sold in 2010. Still, that was triple the number sold in 2006. In Argentina and Colombia, respectively, new-car sales last year gained 50% and 25% over unit sales in 2006.

The trend continues in most Latin American countries. In Colombia, February car sales totaled 25,527 units, a 51% gain over the same month in 2010. In Chile, February sales grew 37% from a year ago, according to the National Automotive Assn. of Chile.

Not all Latin American markets are firing on all cylinders, however. Mexico, whose economy is tightly connected to that of the United States, posted sales of about 820,000 vehicles last year. That’s an improvement over 2009, but well down from 1.2 million in 2006. Dealers said the opening of Mexico’s market to used cars from the United States has cut deeply into sales.


In Venezuela, about 125,500 cars were sold last year. That’s down from a peak of about 492,000 in 2007, before President Hugo Chavez began applying higher duties and import restrictions to help rein in Venezuela’s inflation, South America’s highest.

Overall, the region’s sales statistics justify the recent comment by GM South America President Jaime Ardila that the carmaker’s Latin America operation is its most valuable asset in terms of return on investment and growth.

Economic stability in Brazil and in other Latin American countries has given rise to relatively cheap credit that has made buying a car much easier.

For example, Tello bought her $14,000 car with just $1,000 down, or $600 less than the dealer was asking previously. Because loans now can be paid off over five to seven years instead of two as was the custom several years ago, her payments are lower and more affordable.

The car market in several countries also has been stimulated by the arrival of several low-cost Asian brands including Chinese models that sell for as little as $7,000, said Manuel Garcia, executive with Ital Motors, the Fiat franchisee for Peru.

Latin America has long been an export platform for the world’s automakers. But carmakers increasingly are focusing on selling to customers in the region.


Hyundai plans to open a $600-million assembly plant next year in Piracicaba, Brazil, that will produce cars for the local market. GM South America is adding a third shift — and 1,500 jobs — to its Sao Caetano plant to add four new models to its Chevy line offered to Brazilian customers. The expansion is part of a $1-billion investment program in Brazil by GM, the country’s leading manufacturer with a 20% market share.

But the downside to the car-buying frenzy can be seen in rising gridlock and deteriorating air quality. In Bogota, monumental traffic jams and delays in mass transit projects have made cars a political issue, dimming the popularity of Mayor Samuel Moreno.

In Lima, choking pollution has spurred calls for laws requiring owners to junk all cars 20 years or older. Citizen groups are calling on the government in Lima to restrict the number of taxis and buses and to enforce vehicle emission laws.

“The problem of excessive cars is caused by many factors, including population growth. Lima’s population has quadrupled in 30 years,” said Luis Quispe Candia, president of a civic watchdog agency called Luz Ambar. “But the street grid is obsolete. That’s due to a lack of planning and a competent regulatory authority.”

At a Chevy showroom in Bogota, retired army officer Omero Romero looked over models in the Chevy showroom in Bogota, having already decided to buy one.

“It’s time to change out my old car and get a new one,” Romero said. “There are a set of very favorable conditions, including the weak dollar, that’s making cars cheaper. Yes, traffic is horrifying, but we all hope it will soon improve.”


Times special correspondents Jenny Carolina Gonzalez in Bogota, Marcelo Soares in Sao Paulo, Brazil; Adriana Leon in Lima, Peru; Andres D’alessandro in Buenos Aires; Fabiola Gutierrez in Santiago, Chile; and Mery Mogollon in Caracas, Venezuela, contributed to this report.