The Rise of Chinese Cars in Latin America

When Claudio Perez, a Chilean truck driver, first made the decision to purchase a Chinese-made family car, he was uncertain. However, the combination of a competitive price and quick delivery time ultimately persuaded him to take the plunge. Fast forward two years, and Perez is now a staunch advocate for Chinese cars. His story is not unique, as millions of car buyers in Latin America have begun shifting their preferences from US- and Brazilian-built cars to Chinese models in recent years.

According to the International Trade Center (ITC), Chinese car sales in Latin America have been on a steady rise. In 2019, the Asian economic giant sold $2.2 billion worth of cars in the region. Just a year later, this figure had escalated to $8.5 billion. Chinese cars now represent 20 percent of the region’s total sales in monetary terms, surpassing the United States and Brazil. With no other market outside of Asia boasting a larger share of Chinese cars, it is evident that a significant shift is underway.

Quality and Competitive Pricing

One of the key factors driving the success of Chinese automakers in Latin America is their commitment to providing quality products at competitive prices. Analysts note that Chinese car manufacturers have made significant improvements in terms of quality, technology, and design in recent years. This emphasis on delivering value to consumers has led to a surge in sales, particularly in the emerging market of electric vehicles. Chinese brands now account for 51 percent of all electric vehicle sales in Latin America, with Chinese-made electric buses dominating the market.

Unlike in the United States and Europe, where protective import tariffs have hindered the growth of Chinese car manufacturers, Latin America has proven to be a fertile ground for expansion. In Chile, where import duties are minimal, Chinese cars represent nearly 30 percent of all car sales. Even in Mexico and Brazil, China is increasingly making its mark on the automotive industry. A prime example is Chinese giant BYD’s decision to build its largest electric car plant outside of Asia in northeastern Brazil, with a projected annual production capacity of 150,000 units.

The affordability of Chinese cars has opened up new opportunities for middle- and low-income populations in Latin America to own their first vehicle. Sebastian Herreros, an economist at the Economic Commission for Latin America and the Caribbean (ECLAC), highlights how Chinese cars have enabled cleaner engine technologies to be introduced in major cities like Santiago, Bogota, and Mexico City. This shift towards cleaner and more sustainable transportation options is seen as crucial for the environmental well-being of these metropolises.

The rise of Chinese cars in Latin America is a testament to the evolving landscape of the automotive industry. By offering a compelling combination of quality, affordability, and technological innovation, Chinese car manufacturers have successfully captured a significant market share in the region. As consumers continue to embrace these new options, the future of the automotive market in Latin America looks increasingly driven by Chinese brands.