The first quarter of 2023 has been a promising period for the automobile industry in Ecuador, as vehicles assembled in the country have regained a share of the market that they had lost in 2022.
According to the Chamber of the Ecuadorian Automotive Industry (Cinae), 15% of the 35,0456 vehicles sold in the first quarter of 2023 were assembled in Ecuador. This is a growth of four points in market share from the previous year, where national cars represented only 11% of the market.
Ecuadorian assemblers have focused on producing trucks and sports utility vehicles (SUVs), which are in high demand in the country, and have also varied their models through short-term investments. David Molina, executive director of Cinae, says that the assemblers have had to reduce their profit margins to compete with Chinese vehicles that have lower production costs.
In the first quarter of 2023, Chinese cars lost market share, falling to 35% from 38.4% in the same period of 2022. The goal is for vehicles assembled in Ecuador to close 2023 with an 18% share, according to Molina.
While Chinese vehicles are the best sellers in Ecuador, local consumers prefer SUVs. According to a list of reference prices analyzed by Cinae, 23% of the cars sold in Ecuador in March 2023 were in the price segment between $18,001 and $20,000, most of which were SUVs. Vehicles between $16,000 and $18,000, mostly sedan-type cars, represented 16% of the units sold in March.
However, there are also high-end cars in the market that cost more than social interest housing (VIS), which can range up to $80,000. In March 2023, 62 cars over $100,000 and 14 cars between $90,001 and $100,000 were sold, according to Cinae.
The first quarter of 2023 has seen a 17% increase in sales compared to the same period in 2022, with 35,046 units sold. With this trend, Cinae expects that vehicle sales could reach 140,000 units in 2023, a figure not seen since 2011.
Two factors influenced higher growth in 2023
The accelerated increase in costs that occurred at the beginning of 2022—due to world inflation, the logistics crisis, and the shortage of microchips—has ceased. During that time, dealerships took more than two months to deliver vehicles. This has been the primary reason for growth in the vehicle market segment.
Second, banks are placing more consumer credit in the market, which Ecuadorians are allocating to goods such as vehicles.
However, the percentage of national vehicles in the Ecuadorian market is still far from the figures of 2015, when they had more than half the market share. The biggest challenges for Ecuadorian assemblers in 2023 will be to maintain their growth and to compete on price with Chinese vehicles.