Uncertainty and economy affect new vehicle sales, which fell by 6.3% in October.

The automotive sector continues to feel the impact of the economic slowdown and uncertainty, which is reflected in the decline in new vehicle sales in Ecuador. According to the latest data from the Association of Automobile Companies of Ecuador (Aeada), between January and October this year, 113,148 new vehicles were sold, 1.5% more than in the same period in 2022. However, comparing October 2023 (10,464) with the same month in 2022 (11,165 ) recorded a decrease of 6.3%.

As in September, when a decline was also recorded, but more drastic (-20.3%), all vehicle segments, except for electrified vehicles and motorcycles, recorded weaker sales. For example, the light segment (cars, trucks and SUVs) fell by 6%, selling 9,269 units in October, compared to October 2022 when 9,868 vehicles were sold. Cars were the ones that recorded the biggest drop in sales this time with -13.3 percent in sales, from 2,847 to 2,467 units sold.

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The segment of commercial vehicles (van, bus and truck) recorded a decline of 8%, from 1,297 units sold in October 2022 to 1,195 units in October this year. The truck segment was the most affected with a decrease of 20%, from 892 units in October 2022 to 718 in October 2023.

Sales vary by city

Genaro Baldeón, executive president of Aeada, analyzed that sales of new vehicles in October were very uneven between the different cantons in the country. While in Quito a growth of 46% was recorded with 3,862 units sold, in the other cantons a decrease of 22% was recorded.

“Pichincha had growth. Our Automundo fair also had a positive effect on sales in Quito,” Baldeón explained.

He added that 2,493 vehicles were sold in Guayaquil, which represents a decrease of 6.7% on an annual basis. On the other hand, a growth of 22.8% was recorded in Cuenca after the registration of 561 new vehicles.

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These differences are also visible by province. For example, while Pichincha sold 7.3% more vehicles, Guayas fell by 14.1%, but the sharpest was Tungurahua with -20.9%.

Here are the sales by province for October, according to Aeade figures:

The executive power assures that the uncertainty and slow movement of the economy are the main causes of the decline in sales.

Uncertainty is affecting the automotive sector by increasing the accident rate of some makes and models, which is why their insurance is now more expensive. Patricio Salas, executive secretary of the Ecuadorian Federation of Insurance Companies (Fedeseg) and general director of the Association of Ecuadorian Insurance Companies (Acose), explained that historically the rate of traffic accidents was around 54%, but in 2022 it increased to 68%, and by July 2023. it was 75%, which seriously affected the insurer’s results. He said that at the end of the third quarter of 2023, the insurance market suffered a technical loss of $15 million, $4 million more than what was recorded until last July.

Electrified and motorcycles, the only ones that grew

The other side of the coin is electrified vehicles and motorcycles. According to the Aeada report, between January and October 2023, the electrified segment accelerated its growth: 9,683 of these vehicles (hybrid and electric) were sold, corresponding to 9% of total sales. Furthermore, this sale is a record compared to sales in the same period in 2022 (5,773), with a growth of 175%.

When it comes to motorcycles, demand growth in the Ecuadorian market continues. From January to October, 164,765 units were sold for a cumulative growth of 5.4% over 2023 and 11% if sales alone are compared to October last year (17,389) versus October 2022 (15,649).