The strength of private demand continues to boost optimism in the Chilean autos market. New vehicle sales reached a record 372,339 units in 2010, mostly helped by a solid 68% y-o-y increase in car sales, estimates from the National Automotive Association of Chile (ANAC) revealed. The momentum has broadly continued well into 2011 with new car and light truck sales increasing 27% year-on-year (y-o-y) to 248,319 units between January and September 2011.
In addition to private consumption and the appreciation of the peso - which has strengthened almost 16% over the past year - the new vehicles market stands to benefit from strong demand in the transport and mining sectors and the country's robust economic activity. We expect vehicle sales to grow an average 9% y-o-y during the forecast period to 571,326 units by 2016. This growth rate will continue to place Chile alongside Colombia and Peru as an outperformer in the Latin American autos market.
However, there is muted optimism in the country's production segment. Production is limited to small assemblies of trucks, such as those undertaken by General Motors Company. In view of the lack of a local suppliers' base and small size of the manufacturing base, we see little prospect of any significant increase in Chilean autos production during the forecast period. As such, we limit our production growth forecast to 10.5% between 2012 and 2016, taking annual production to 8,670 units by the end of the forecast period.
The market looks set for a significant overhaul in terms of the competitive landscape. Data for the first nine months of 2011 show that the share of Chinese carmakers in Chilean vehicle imports grew to 21%, compared with the 8% share they occupied during the same period last year. However, it is South Korean carmakers which dominate the imported vehicles market in Chile, with a 44% share, although that is down from 53% during the same period last year. Indeed, these results are outcomes of FTAs signed between China and South Korea in 2006 and 2004 respectively.
Chile is also becoming a prime market for luxury vehicle sales in the region, testifying to our longstanding views about its potential for premium cars. In October 2011, Rolls-Royce, a subsidiary of German car manufacturer BMW, revealed plans to make a foray into the Chilean market - as well as Brazil - in 2012, in an effort to expand its presence in the South American region. Rolls-Royce CEO Torsten Müller-Ötvös cited promising economic growth along with rising demand for luxury vehicles as the key attractions for the company.
Click for report details: Chile Autos Report 2012