A slight growth in sales is expected by the Ecuadorian automotive sector in 2023, despite more challenges

The Ecuadorian automotive sector awaits slight growth in sales between 2 and 3% in this 2023in relation to 2022, the year in which they estimated to close with 140,000 units sold, according to Genaro Baldeón, executive president of the Association of Automotive Companies of Ecuador (Aeade).

The good moment of the Ecuadorian automotive sector in 2022 is a sign “of a clear commercial and economic recovery, especially in the segments related to productive activities,” Baldeón quotes the magazine engines of the newspaper EL UNIVERSO, where he was asked about the growth and sales projections of this industry for this 2023.

Between January and October 2022, sales of new vehicles even increased by 18% compared to 2021 and 5.5% compared to the same period in 2019, “which demonstrates the clear recovery of the market,” explains Baldeón in engines.

Comparative sale of vehicles in Ecuador (Aeade figures)

David Molina, executive director of the Chamber of the Ecuadorian Automotive Industry (Cinae), has similar projections.

In 2022, the sector expected to close with sales of 134,000 units, 17% more than in 2021. Of this value, 11% corresponds to locally assembled vehicles, a percentage lower than the 15% registered in 2021, Molina details.

For this 2023adds, is projected a market of between 135,000 and 138,000 unitsof which the 13% would be of National Production.

Main challenges of the automotive industry this year

• A competitiveness agenda

“The main challenge (for this 2023) is to approve a competitiveness agenda for the automotive industrial sector, which allows it to face the challenges of a more open and competitive market. For this, it is necessary to work with the Government to eliminate the taxes that distort and make national production more expensive,” says David Molina, from Cinae.

In the same way, he says, it is necessary to equalize “the conditions of competitiveness that the competing countries have, in terms of incentives for local production.”

• Increase in import cost

This 2023 is also shown to be a challenging year, since the global logistical and production difficulties registered since 2021 will continue in the coming months, assures Genaro Baldeón, from Aeade.

The latter, he says, is evident in Ecuador with a significant increase in the cost of importing vehicles.

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“The Ecuadorian automotive sector faces an unstable political and socioeconomic environment that could be affected by the environment of insecurity and social crisis. Likewise, the economic slowdown that the country is facing, together with the lack of liquidity in the financial sector, which has increased interest rates in the corporate segment in recent months, generate a complex scenario for the automotive trade”, says Baldeón. .

• Take advantage of ICE reduction and new fuel

Despite all the important risks that they foresee, it is expected to take advantage of the introduction of the new 95 octane fuel and the tax changes that reduced the ICE (tax on special consumption) for hybrid vehicles and decreased 1% in the ISD (tax on the outflow of foreign currency) for the importation of vehicles, comments the representative of Aeade.

• Extra reform, option so that more Ecuadorians can buy a car

An additional reform that rationalizes the tax burden is necessary to improve access to vehicles for Ecuadorians, taking into account global inflation and the increase in vehicle production costs, adds Baldeón.

Sales by segments in 2022

Commercial vehicles (van, bus and truck) used to transport goods fully recovered and even exceeded pre-pandemic records, according to Aeade representatives.

Only from January to October 2022, sales of commercial cars grew by 29%, compared to the same period in 2021, and 13% more than in 2019, according to figures from the Association of Automotive Companies of Ecuador. .

Commercial Vehicles. Sales in Ecuador in the last four years (Aeade figures, from January to October)

“These types of vehicles register values ​​close to those observed in the boom from 2011 to 2014, and with sales of 13,701 units between January and October (2022), it reaches the highest value that has been recorded since 2014”, explains Genaro Baldeón, from Aeade.

Lightweight vehicles. Sales in Ecuador in the last four years (Aeade figures, from January to October)

In the case of light vehicles, the growth in sales, from January to October 2022, was 4.6% compared to sales in the same period of 2019, the pre-pandemic year.

Hybrid and electric vehicles

From January to October 2022, 6,130 hybrid and electric vehicles were sold compared to 3,294 in 2021 in the same period, according to the statistics of the Association of Automotive Companies of Ecuador.

6,130 hybrid and electric cars have been sold so far this year, its price is a brake on marketing

This represents a growth of 86%. “And it demonstrates the impulse that the automotive sector seeks to provide to innovation and sustainability in the mobility of Ecuadorians,” says the representative of Aeade.

Gasoline, the most used fuel in Ecuador

1. With 70%, Gasoline continues as the leader in the share of car sales by type of fuel in 2022, from January to October. With this, it is the most used in the Ecuadorian automotive sector.
2. follow the diesel with 25% of the share in car sales in 2022 by type of fuel.
3. With the 5 % are they hybrid and electric carsaccording to the figures of the Aeade.

Going from super 92 octane gasoline to super premium 95 octane gasoline, which began to be sold in October 2022, opened the doors to new automotive technologies, and by 2023 the market will diversify even more, say representatives of this sector. (YO)