Chinese and European car brands are gaining ground in the automotive market of Ecuador. Prices, design, technology and innovation are what attract local consumers and those targeted by companies. Thus, Chinese cars that represented 3% of sales in 2008, grew by 13% in 2018. And Europeans have also had an important entry, and that decade grew from 1% to 6% of the market.
Genaro Baldeón, of the Association of Automotive Companies of Ecuador, explains this important penetration. As for the Chinese brands, he assures that it is logical that China being the largest car factory in the world has this penetration not only in Ecuador or the region, but throughout the world. And European cars also gained ground, due to the reduction of tariffs for the agreement with the European Union. For the first days of 2019 the tariff reduction will represent 15% in three years.
Additionally, the Ecuadorian market has registered a behavior characterized by a repressed demand following a policy of quotas and safeguards.
In general, the sale of cars recovered because all 2017 sold 105,077 units and in this year, until November, the figure was exceeded with 126,255 units.
But the greater entrance of vehicles has been to the detriment of assembled in Ecuador. Thus, vehicles of national origin lost about 15 points of participation in the local market in ten years.
For David Molina, of the Chamber of the Automotive Industry, it is a fact that the assembled firms lost competitiveness, among other reasons, due to the high tariff of 15% of the imported CKD, which are the basis of their units.
However, it clarifies that the Comex has just approved resolution 025 2018, which eliminates the tariff for new projects from January 1, 2019. It is also approved that the CKD tariff for imports of automotive activities be reduced to 13%. existing In this sense, he says that there is a positive expectation of being able to recover the market.
According to Miguel Aguirre, deputy commercial director of the Chinese BAIC, new consumer trends have evolved, preferring highly equipped SUV vehicles at affordable prices. The brand, represented in Ecuador by Automotive and Anexos, was launched only in October. Aguirre explains that at the moment 46 vehicles have been commercialized, but they have the prospect of selling 800 units in 2019.
Representatives of Changan, another Chinese brand, also manage positive figures since their presence a year ago in Ecuador. One of their strategies is that when buying the car they have 5 years or 100,000 km. To date 750 families have purchased cars from this commercial home.
Although Baldeón says that 2019 could register lower sales than in 2018, due to the lack of access to credit and because the repressed demand has already been satisfied.
Projects, ready to assemble with 0% rate
The assemblers of Ecuador refine their new projects after a Resolution of the Committee of Foreign Trade. Is that last December 10, through Resolution 025 2018, said Committee established that from January 1, 2019 a tariff of 0% will be applied to the importation of CKD (vehicles to be assembled) that are intended for “new projects”, duly qualified by the governing body of industrial policy. Likewise, the regulation indicates that for the current assembly projects there will be a variable reduction.
Pietro Pilo, from Ciauto, explains that in his company they have two projects in the pipeline, which were awaiting Comex’s decision. If all is done as expected, the two new models would enter the market for the second half of 2019. However, he says that there is still a step that must be taken by the Ministry of Industries and is to define certain procedures.
Spaces for car sales have also grown this year. A few days ago, the El Recreo Autoshow was inaugurated in the south of the city. A space in which at least nine brands are shown every day of the year. José Francisco Salgado, marketing manager of El Recreo, explains that 800 m2 have been allocated for the project and that in the short time they have been open they have already generated sales. (I)