Sound economic policies, maintained consistently since the 1980s, have contributed to steady growth, reduced poverty rates by over half, and have helped secure the country's commitment to democratic and representative government. Chile has increasingly assumed regional and international leadership roles befitting its status as a stable, democratic nation.
Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercosur, China, India, South Korea, and Mexico.
Chile is home to the fifth largest automobile fleet in Latin America.
Total area of 756,950 km2, being 748,800 km2 of land and 8,150 km2 of water.
|Major cities|| |
Santiago (population 7 million), Puente Alto (568,000) , Maipú (510,000), La Florida (405,000), Vina del Mar (325,000)
US$298 billion (2018)
|Unemployment rate|| |
7% (October 2019)
|Main industries|| |
copper, fruit, fish products, paper and pulp, chemicals, wine
Chilean Peso (CLP)
|Interest rate|| |
1.75% (October 2019)
|Political key info|| |
Presidential terms are four years.
In June 2005, Chile completed a nation-wide overhaul of its criminal justice system. The reform has replaced inquisitorial proceedings with an adversarial system more similar to countries such as the United States.
2.5% (October 2019)
|Total Car park|| |
|New vehicle registrations (Cars, LCV, Trucks)|| |
Chile saw 372,878 new vehicle registrations in 2019, an fall of 10.6% from 2018. Of this, 141,717 were passenger vehicles, 137,303 SUVs and crossovers, and 93,858 pickups and light commercial vehicles.
Chile has more than 300 electric buses circulating on streets, provided by BYD.
|Top 5 brands (total market)|| |
2019 light vehicles
1. Chevrolet: 35,395 units (+16.3% year-over-year)
|Model preference top 5 (total market)|| |
2019 light vehicles (light passenger, pickups, SUVs)
|Total Fleet Park (company cars)/Fleet penetration in total fleet sales|| |
In terms of cars, only about 7% of those acquired in Chile are for corporate use. Commercial vehicles (LCVs and Pickups) account for over a quarter (25-26%) of all those imported.
|Evolution fleet sales (last 5 years)|| |
In 2019, commercial vehicles sales dropped 16% to 85,652 units from 102,169 (source: OICA)
On average, commercial vehicle sales in Chile represent approximately a quarter of the market.
|Top 5 fleet brands (fleet market)|| |
It depends on the segment, but among those with high demand are the Hyundai Tucson SUV and sendans produced by Volvo and Audi.
|Fleet Model preference top 5 (fleet market)|| |
light commercial vehicles (LCV)
The basis of company car taxation in Chile is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any.
1. Car taxation
1.1. Registration tax
Car registration is taxable in Chile.
Individual or Corporation
Fixed amount (EURO 70 approx.).
Within 30 days from the date of purchase
1.2. Annual circulation tax
Annual Circulation Tax for vehicle in Chile
Individual or Corporation
March, each year
First three month of each year.
Progressive between 1 to 4,5% over the fiscal value
2. Income taxes
ü Income Taxes for The Car Industry= Taxable Income 25 or 27% depending on the system
ü Expenses are only deductible if the car is used for the business of the company or as .
ü If the car is used for the owner, partner or shareholder of the company, may be consider as a deemed dividend subject to a penalty tax between 40% to 50% percent.
ü VAT Taxable: (VAT Debit – VAT Credit)* 19%
4. Company car
4.1. VAT due on private use of company cars
4.2. Company car in personal tax returns – benefit in kind
ü If the car is used for personal reasons of an employee would be consider as a salary in kind, subject to payroll tax 0% to 35%.
5. Special schemes (if any)
5.1. Additionally, for new motor vehicles, small and medium-sized motor vehicles are subject to a single additional tax.
Source: BDO (2018)
Corporate vehicles in Chile are mainly aimed at supporting company operations or management (vans, pickups), being a tool for technicians or sales people. Vehicles for benefit are also issued in some cases. These are called executive fleets, and they involve cars (SUVs, sedans) which are intended for directors.
The OL (operating lease) has been popular in Chile historically because it makes the acquisition and operation of vehicles less expensive. However, the fact that most vehicles are imported (using over 15 different currencies) makes them expensive overall. OL suppliers used to have their own service structure but this is changing. The market is open and there are no barriers to importation so fleet sales in Chile are supported now by dealers.
FSL (full service leasing) is well-developed in Chile and popular in the mining industry where the full cost of operating commercial vehicles is tax deductible. Despite there being no tax incentives for cars, fleet customers are beginning to recognise the advantages of FSL for benefit cars as well. It is still in early development but is showing signs of growth.
When it comes to employees using cars for private use, this allowance really depends on the policy of each company. It is more common for executive fleets, however. Monitoring private use is controlled by telematics.
When it comes to paying for traffic tickets, the person assigned to thee car when the traffic ticket occured is responsible for paying. However, this depends on each policy as there are specific cases in which the company assumes responsibility.
Usually, fines are sent to the vehicle leasing or fleet management company. The company pays the fine and then charges the driver.
Like many other countries in Latin America, the driver mindset in Chile is moving from “ownership” to “user-ship”.
Cash, bank loans and finance leasing have all been popular methods for vehicle acquisition historically in Chile with Banco de Santander (the largest player), and other banks offering finance leasing and vehicles loans. However, things are changing.
Specialist fleet leasing companies like ALD, Arval Relsa and others have set up shop to drive this change and persuade fleet managers that owning vehicles is not a good investment for profits.
Corporate fleet customers are happy to forego legal right to possession of vehicles to keep capital in the bank and lines of credit open. However, giving up control of fleets is not as well accepted.
June 8, 2020
Average gasoline price per liter: US$1.10 (world average is US$0.95)
Average diesel price per liter: US$0.76 (world average is US$0.86)
September 1, 2019
Average electricity price per kWh Households: US$0.18 (world average is US$0.14)
Average electricity price per kWh Business: US$0.14 (world average is US$0.12)
Gasoline is by far the main fuel used in Chile's combustion engine automobiles.
The concept of TCO (total cost of ownership) of vehicles is not well understood in Chile and is not something corporate customers consider when thinking about fleet funding. The fact that almost 30% of TCO is in the cost of fuel does not appear to have a bearing on the type of vehicle selected or that 10% of TCO is taken up in interest rates if vehicles are funded through bank loans and 25% accounts for depreciation.
FSL (full service leasing) is well-developed in Chile and popular in the mining industry where the full cost of operating commercial vehicles is tax deductible. Despite there being no tax incentives for cars, fleet customers are beginning to recognise the advantages of FSL for benefit cars as well.
Of the top seven countries with largest fleets in Latin America, Chile is ranked second in terms of cars requiring the most safety features. Among the features only required in Chile and Ecuador (ranked No. 1) are visual and sound alerts for seat belts, anchored seats, frontal collision protection, and lateral collision protection.
Approximately 35.5% of the cars in Chile have insurance.
Vehicle insurance is a voluntary and can be contracted individually or collectively, being renewed periodically. Besides indemnifying damanges to the insured vehicle within the national territory, insurance covers against accidents, theft, and damages to third parties.
Mandatory third-party vehicle insurance: The Mandatory Personal Accident Insurance, (Seguro Obligatorio de Accidentes Personales, SOAP), consists of a personal accident insurance coverage that must be contracted by the owner of any motorized vehicle, trailer or cargo with an insurance company. This insurance is intended to cover the risks of death and personal injury that are a direct consequence of accidents suffered by people in which the insured vehicle is involved. (Source: Mapfre 2017)
A connected car fleet can generate ten times the income as a non-connected car fleet, according to 76% of the auto industry executives surveyed by Chile's national automotive association (Anac). In the same survey, 82% fully or partially agree that vehicles need to have their own operating system.
While Chile was the first Latin American country to adopt the Euro-5 emission standard, the Environment Ministry is working toward the implementation of the new Euro 6 standard for both diesel and gasoline vehicles entering the country. The ministry intends to publish this new standard by September 2019, so that it becomes effective by September 2020.
Chile also has its Green Tax law and fuel economy label scheme. Regarding the former, the ministry is drafting a proposal which updates the law, applying it to light and medium vehicles.
Due to the advanced technological developments, a small fraction of the car brands in the country could face complications. However, most brands will be able to comply to the law, according to automotive trade chamber (Cavem) president Carlos Dumay.
Meanwhile, energy & transportation ministry, the telecommunications ministry, and the environment ministry have come together to develop the country's National Electromobility Strategy.
This initiative aims to ensure that 40% of private vehicles and 100% of public transportation vehicles are electric by 2050. It also seeks to reduce energy demand by 20%, as well as mitigate greenhouse gases.
In July 2018, Chile commissioned Chinese EV manufacturer BYD to provide 100 K9FE fully-electric buses for the country, the largest order of its kind in the Americas. The vehicles will carry the latest technology in BYD batteries, and will be operating thoughout the country by the end of November 2019. The operation is also being supported by international energy distributor Enel.
The incorporation of e-buses makes Chile one of the pioneers of urban electric mobility in Latin America, serving as a model for other markets.
Safety standards are evolving. In more and more Latin American countries, large companies are moving away from cheap models with little safety equipment and are now preferring international safety standards for their whole fleets (including ABS, airbags, seatbelts for all seats).
It's early days for carsharing on most of the Latin American continent but interest is growing, helped by traffic congestion and rising environmental awareness in large cities.
As one of the world’s biggest lithium producing countries, Chile plans to further increase its output in the coming years. Big lithium players such as Chile cannot afford to slow things down if they want to stay on top. Lithium prices are likely to drop as we go into 2020, but the question remains whether the reduction in price will actually reduce the price of electric vehicle batteries.