The share of vehicles assembled in Ecuador had an “improvement” in 2023, from 11.3% to 14.2%

The share of assembled vehicles in the Ecuadorian market had an “improvement” in 2023, moving from 11.3% (2022) to 14.2%, although the expectation at the beginning of the year was to reach a share of 16%, as revealed by David Molina, executive director of the Chamber of the Ecuadorian Automotive Industry (Cinae). However, for the leader, the growth of 2.9% is still low compared to the positioning of the industry between 2018 and 2019, when it reached a 35% share.

Meanwhile, unlike assembled vehicles, last year the share of imported vehicles fell from 88.7 percent registered in 2022 to 85.8 percent.

Returning to assemblies, Molina revealed that in 2023 the industry assembled 18,916 vehicles in the country, while in 2022 that figure was 15,140. This growth is related, according to Molina, to several factors, the most important of which is the dedication of some assembly companies in the country that have decided on new investment projects to develop new projects. And he cited as an example that the Hyundai Creta, the Great Wall truck and other projects began to assemble because they gave some viability to the issue.

Another determining factor, Molina said, is the effort companies have made to capture more of the market, since it’s a high-volume industry. “If plants are not producing a certain volume and are not efficient, then more volume has to be generated in order to be able to compete or to be able to have a fairly reasonable competitive standard. It’s a very complicated task because of the conditions the country is in, but there is an important effort that the automotive industry has made to maintain the quality employment it creates,” he explained.

As for falling short of the proposed 16 percent share target, Molina said they fell short as the market shrank due to several issues, including politics and economic instability, although he hopes the situation will turn around this year. “If you look at the market trend month by month, you see how from July last year sales start to fall, then the markets shrink and obviously the volumes are less, you lose competitiveness and because of that companies start to produce a little less, so we’ve seen that the market is compressed in in the second half of the year mainly due to political issues, instability, etc., which we hope will be reversed this year,” he stressed.

Sale of assembled vehicles in monthly units:

Overall, according to Cinae, 2023 concluded with sales of 132,979 units between completed and imported, while 2022 was 134,309 units. “There is a slight reduction in overall vehicle sales,” Molina said, adding that they have more than projections for this year, one of which is to close in 2023, which is optimistic.

In a more conservative scenario, the closure would be estimated below 130,000 units, or more or less 129,600 and in that line they see a conservative scenario of maintaining the market share at 14.4% of the industry and a market optimistic increase to 15%. . “We don’t have more aggressive goals than these, but obviously it’s still a half-blind projection because the fiscal structural reforms that the government has to implement have not yet been completed,” he pointed out.

As an example, he stated that there are major problems in the payment chain, the government has debts of almost 4 billion dollars, so it cannot pay suppliers, the supplier does not pay its own, and the supplier does not pay others. is a decrease in liquidity that also causes a slowdown in the automotive market.

Molina indicated that the most common form of payment for the purchase of a vehicle is a loan, for which two conditions must be taken into account: whether you will keep your job and timely payment of salary, otherwise there is uncertainty about employment and these delays. in payment chains. “To the extent that this is resolved, we can adjust the projections, but for now we still see a compressed market,” he analyzed. Furthermore, he said there is an ongoing competitiveness program for an industrial sector that has not progressed for several years, amid trade opening that poses more complicated challenges.