Total South America Passenger Cars Sales & Trends (Since 2005)
According to the OICA, the total passenger car sales in South America in 2022 was 1.7 million units, a decrease of 6.3% from 2021. Brazil is the largest car market in South America, accounting for over 80% of the region’s sales volume. Argentina is the second largest car market in South America, with sales of 250,000 units.
The decline in car sales in South America is due to a number of factors, including the COVID-19 pandemic, economic challenges, and currency devaluation. The COVID-19 pandemic has disrupted supply chains and led to production delays, while economic challenges, such as high unemployment and low incomes, have also dampened demand. Currency devaluation has made cars more expensive, which has also made them less affordable.
Despite the decline in car sales, there are some positive trends in the South American passenger car market. The market share of SUVs has increased significantly in recent years, and it is expected to continue to grow in the coming years. In 2022, SUVs accounted for 45% of new car sales in South America, up from 35% in 2019.
The South American passenger car market is expected to grow in the coming years, but it is unlikely to return to the levels seen before the COVID-19 pandemic. The market is expected to grow at a slower pace than in previous years, and the shift to SUVs is expected to continue.
South American Automotive Market Trends
South America, with its diverse economies and cultures, has had a unique trajectory in the automotive industry. South America faced significant economic challenges during the past decade. Countries like Brazil, Argentina, and Venezuela underwent periods of economic recession or instability, impacting vehicle sales. On the flip side, when economic conditions improved, pent-up demand led to a surge in sales.
Due to urban congestion, challenging road conditions, and price sensitivity among consumers, compact cars remained popular. Brands that offered affordable and fuel-efficient models, such as Volkswagen, Chevrolet, and Fiat, maintained strong positions in several South American markets.
Mirroring global trends, there was a growing demand for SUVs and crossovers, albeit at a slower pace compared to regions like North America. These vehicles are perceived as versatile, especially for varied terrains present in many parts of the continent. Brazil continued to be a significant market for flex-fuel vehicles that can run on gasoline, ethanol, or a mix of both. The widespread availability of ethanol, thanks to the country’s vast sugarcane production, supported this trend.
Given the import tariffs and the need to cater to local demands, many global automakers have established manufacturing or assembly plants in key markets like Brazil and Argentina. Due to economic factors and sometimes high import tariffs on new vehicles, the used car market remained robust in several South American countries. This trend also stemmed from consumers seeking more value for their money, especially during economic downturns.
The EV market in South America lagged behind Europe, Asia, and North America. Limited charging infrastructure, high costs associated with EVs, and the absence of significant governmental incentives kept the adoption rate lower. However, there was growing interest, especially in countries with more stable economies. As with the rest of the world, South American consumers showed increasing interest in vehicles offering advanced infotainment systems, connectivity features, and safety technologies.
