Despite more challenges, the Ecuadorian automotive sector expects a slight growth in sales in 2023

The Ecuadorian automotive sector is waiting slight growth for sale between 2 and 3% in this 2023with regard to 2022, the year in which they would close an estimated 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 forecasts of this industry for 2023.

In fact, between January and October 2022, new vehicle sales increased by 18% compared to 2021 and by 5.5% compared to the same period in 2019, “demonstrating the clear recovery of the market”, explains Baldeón in engines.

Comparative sales of vehicles in Ecuador (Aeade numbers)

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

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

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

Main challenges of the automotive industry this year

“The main challenge (for 2023) is to adopt a competitive agenda for the automotive industry, enabling it to meet the challenges of a more open and competitive market. For this, it is necessary to work with the government to remove the taxes that distort national production and make it more expensive,” said David Molina of Cinae.

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

2023 is also proving to be a challenging year as the global logistics and production problems registered since 2021 will continue in the coming months, assures Aeade’s Genaro Baldeón.

The latter, he says, is evident in Ecuador with significant increases in vehicle import costs.

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

Despite all the significant risks they foresee, it is expected to benefit from the introduction of the new 95 octane fuel and the tax changes that have reduced the ICE (Special Consumption Tax) for hybrid vehicles and the ISD (Special Consumption Tax) consumption) by 1%. on the outflow of foreign currency) for vehicle imports, Aeade’s representative notes.

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

Sales by segment in 2022

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

From January to October 2022 alone, commercial vehicle sales 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 past four years (Aeade figures, from January to October)

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

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

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

Hybrid and electric vehicles

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

6,130 hybrid and electric cars sold so far this year, price is a drag on marketing

This represents a growth of 86%. “And it shows the impetus that the automotive sector wants to give to innovation and sustainability in the mobility of Ecuadorians,” says the representative of Aeade.

Gasoline, the most commonly used fuel in Ecuador

The transition from super 92-octane petrol to super premium 95-octane petrol, which came on the market in October 2022, opened the doors to new automotive technologies, and by 2023 the market will diversify even more, industry representatives say.