Many who are in the automotive industry in Mexico think or express that the national market is very competitive, that there are more and more brands and this means that the slice of the pie that they get is less and less. Yes, the bite is smaller every day, but this does not mean that it is the most or that you cannot live under these circumstances. Central and South America, with the exception of Brazil, are all smaller markets than Mexico and almost all of them have more brands. An example of this is Ecuador.
Last year the Ecuadorian car market not only reached pre-pandemic levels, but also had a historic performance, reaching 139,517 units, according to figures from the AEADE (Association of Automotive Companies of Ecuador). That cake is distributed among more than 55 brands, while in Mexico the 1.07 million cars sold in 2022 were divided among 49 brands.
The car consumer in Ecuador has options to choose from not only among brands that the average Mexican has never heard of such as Brilliance, Changhe, DFSK, Domy, Donfeng, Jinbei, King Long, Lifan, Mahindra, Shineray, Soueast and Zotie , among others, but if none of these brands convinces them, they are free to import new cars from wherever they want, paying tariffs of 40%, in addition to other taxes, such as VAT, which is 12%. If the imported car is hybrid or electric, it is exempt from paying tariffs, to encourage the sale of these vehicles, which in 2022 represented close to 5% of the total sold.
For a car lover, driving through Ecuador is an exercise in car knowledge, often resulting in some frustration. The nice side is to see some 80s Lada Niva on the road with even surprising frequency. It’s also nice to see, although less regularly, a luxurious DS. Cars of well-known brands that are not sold in Mexico are also part of the Andean country’s landscape, such as the crossover Kia Sonet subcompact, a true sales champion.
Leaders and trends
Another example of unknown cars from major brands is the true monarch of sales in Ecuador in 2022, in fact, the only vehicle still assembled in that country: the Chevrolet D-Max pickup, which reached the hands of more than seven thousand Ecuadorians. .
Chevrolet is the market leader, with about 19%. It’s closely followed by Kia, which has around 17%, but third-place Toyota sold less than half the leader. Hyundai, Chery (Chirey, in Mexico)Renault, Great Wall, Jac, Jetour and Volkswagen complete the “top ten”.
The Jetour X70, for example, was the best-selling SUV in Ecuador in 2022, followed by the Captiva and the Chery Tiggo 2. Kia, with Soluto and Picanto, leads the car segment. I hope with this I give you an idea of how different that market is from ours and how frustrating it is not to recognize many cars on the streets of Quito, where I was for a week.
Congested like any big city, the Ecuadorian capital has its original way of limiting the circulation of cars. His “no circulation today” is colloquially called “pico y placa”, because the cars are not out of circulation during the whole day when it is their turn, only from 6:30 am to 9:00 am and from 4:00 pm to 7:30 pm, that is. , peak hours. In particular, it seems to me a solution that is perhaps more complicated to administer, but implies less punishment for citizens. Hybrids and electrics, by the way, are no exceptions and also need to park when it’s their turn.
With a “dollarized” economy since the year 2000, the Ecuadorian receives a minimum monthly salary of 450 dollars and just over 70% of the car market is priced between 15 and 20 thousand dollars. Only 20% buy cars priced below $15,000 and this also shows a significant difference for our market.
Traveling illustrates, without a doubt. I return from Ecuador not only with great sympathy for that pleasant country, but also with the certainty that there are ideas there that we can use, but more than anything, I come back with the feeling that Western brands need to do something urgently or their market will be reduced to the rich who can buy the electric ones that insist on building and that, in Latin America, is far from being a reality.
