Analysis
17 Apr 18

Asia eyes Argentina, Uruguay as auto market recovers

Some of the best performance in terms of automobile sales in Latin America last year took place in South America, two of which were Argentina and Uruguay.

Among those eyeing the two countries in the wake of the comeback are OEMs, auto parts companies, and entrepreneurs from Asia. Below is our Global Fleet snapshot of the two countries.

Argentina

In Latin America's third largest automobile market, vehicle producturion rose 20% year-over-year to 110,598 units in the first quarter, bringing the country one step closer to “Plan 1 Millón”, its national program aimed at reaching a vehicle production target of 1mn/y by 2023.

Meanwhile, wholesale vehicle sales reached 217,747 units in the first quarter, up 16.4% year-over-year. The uptick was supported by a 58% jump in exports.

Although OEMs from various countries are eying the market as it recovers, a considerably large amount from Chinese automakers are preparing to commercialize their models in the country. A total of 12 are expected in the country by the end of 2018.

Among those already present are Chery, DSFK, JAC, Dongfeng, Foton, Shineray, BAIC, Lifan, and Geely. They collectively sold some 20,000 units last year, equivalent to about 2% of the market.

Moreover, by the end of April, Haval should be launching an SUV and Great Wall should be introducing a new pickup into the market. Both are being imported by the Antelo group of Manuel Antelo. Finally, by year-end, automaker Changan should be arriving in Argentina.

Lifan X50, available in Argentina and Uruguay (SOURCE: Lifan Argentina)

 

At the same time, Indian entrepreneurs are eying the country. Among them are parts manufacturers seeking to commercialize their products and maybe even partner up with a local firm.

“It is not our intention to sell to Argentina, but more to produce in Argentina," said Indian Trade Promotion Council (TPC) director Sandip Das who recently led a mission of one hundred entrepreneurs visiting the country, the largest delegation of its kind in Argentina’s history.

"We are interested in Argentina because there are many automakers here which can export," said Bhullar Auto Production Director Gurucharan Singh Bhullar. The company manufactures special fasteners, pressings and assemblies for the automotive industry.

Currently, India exports US$45mn in cars and US$40mn in motorcycles to Argentina, representing some 18% of its US$500mn/y in products going to the country.

Among the Indian OEMs in Argentina are automakers Mahindra and Sonalika, and motorcycle manufacturer Bajaj. Sonalika has partnered up with Apache Santa Fe to build vehicles in Las Parejas and Bajaj has partnered up with Santa Fe Corven to build motorcyles in Venado Tuerto.

Uruguay

Although a much smaller market, the neighboring country of Uruguay has also seen a rise in activity, thanks to Asian automotive companies.

In 2017, the value of vehicle and auto parts being sent out of the country rose 75% year-over-year to US$112mn.Japan’s Takata auto parts led with US$34.2mn in exports, followed by Chinese automaker Lifan with US$30.8mn.

In terms of Lifan, the company has been making a comeback since May of last year and much of it is due to exports to Brazil. The 2,150 units exported over the last year or so, however, does not compare to the 7,000 units exported during Lifan’s peak which was in 2015.

Upon receiving approval from parent company Lifan China, Uruguay is hoping to reach 3,500-4,000 units this year.

 

Photo: China's Byton electric-car. As of 2018, unavailable in Latin America (SOURCE: CES)

Authored by: Daniel Bland