Automobile distribution in Latin America
As Latin America boasted the region with the best car sales uptick last year, let's look at its emerging production centers and the brands which have built up their networks in the wake of globalization.
First of all, we must note that the world's automobile assembly and auto parts production activities have been migrating to countries outside the traditional automotive markets, and among them are Latin America's largest automobile producers, Brazil and Mexico.
While Brazil benefits from being a potentially large domestic market with a low level of motor vehicle ownership and a rapidly growing economy, Mexico's low production cost coupled with its proximity to the large automobile market of the United States makes it ideal for automobile production.
Brazil v.s. Mexico (2018 data)
As for distribution, the supply chain starts at OEM headquarters and then trickles down to exclusive or multi-brand regional offices or wholesalers, the latter being privately owned, OEM owned, or a joint venture. As for delivery times, having a large network of dealers is one of the keys.
Among the most successful brands in Latin America are Chevrolet, Volkswagen, Nissan, Toyota, and Ford. While the best-sellers in Brazil are GM, Volkswagen and Fiat, those in Mexico include Nissan, GM (primarily Chevrolet), and Volkswagen.
Although there are several brands being marketed throughout the region, here is a snapshot of the top three.
While most of General Motor's production capacity is in Brazil and Mexico, it also has assembly plants in Argentina, Colombia, Ecuador and Chile, primarily Chevrolet.
As for dealerships in the larger markets, Brazil has 580, Mexico 69, Argentina 349, Colombia 118, Ecuador 67, and Chile 60, helping the company achieve the title of best-selling brand in Latin America.
Although the Volkswagen group produces cars in Mexico, most of its production capacity is in Brazil and, according to South America president Pablo Di Si, capacity needs to be raised even more to sustain the expected demand following the company's bold announcement in 2018 to launch 20 new models by 2020.
Brazil leads with 505 dealerships, followed by Mexico 164, Argentina 156, Chile 37, Colombia 30, and Ecuador 14.
While most of Nissan production and operations stem from Mexico where it holds the title of best-selling brand, the company also produces vehicles in Brazil and Argentina. It also has operational support in those two countries, as well as in Peru and Chile.
As for dealerships, Mexico has 214, Brazil 172, Chile 53, Argentina 52, Colombia 49, and Ecuador 18.
Impacting the market in 2019
Photo: Cars at Veracruz port, Mexico (source: Shutterstock)