Chile

David Oakley, Analyst, Americas Vehicle Sales Forecasts

18 February 2021

Is Chile the most crowded market in the west?

Which country would you expect to boast the wider range of Light Vehicles on sale? One that regularly sells over 15 million units per year, like the US, or one that has never sold more than 415,000 Light Vehicles in a single year, like Chile? Surprisingly, the answer is Chile. In 2020, 525 different models were sold in Chile across 80 brands, compared to 377 models from 45 brands in the US. So, what is behind this counter-intuitive fact?

“Chile is a relatively free and open economy and has signed several free trade agreements, including with the US and China. These agreements have led to low tariffs, enabling OEMs to pour into the Chilean market.”

Firstly, Chile has no auto production. Therefore, if the country is to have any new vehicles, it must import them. Chile is a relatively free and open economy and has signed several free trade agreements, including with the US and China. These agreements have led to low tariffs, enabling OEMs to pour into the Chilean market. And the fact that Chile is not a ‘home’ market for any brand may have emboldened manufacturers to stake a claim for a slice of the potential sales.

One notable difference between the Chilean market and some others in the Americas is the presence of Chinese OEMs in Chile. Generally priced at the lower end of the market, it is easy to see the appeal of vehicles such as the MG ZS Small SUV, which was the fourth highest selling model in Chile last year. But it is not only Chinese brands that demonstrate China’s influence on the Chilean market. The fifth most popular model in 2020 was the Sail, which falls under the American brand Chevrolet, but is built in China.

“The Mitsubishi L200 Pickup topped the sales charts in 2020, but its market share was a modest 3%.”

With so many brands on offer, it logically follows that the Chilean market is extremely fragmented. The Mitsubishi L200 Pickup topped the sales charts in 2020, but its market share was a modest 3%. Even in a ‘normal’ year, the L200 sells only around 10,000 units. At the OEM level, Hyundai Group leads the way, but with a market share of 14.1% in 2020, it is far from dominant.

Generally speaking, the outlook for the Chilean market is bright, despite downside risks from political uncertainty and pandemic-related economic scarring. Car ownership rates are relatively low, and the pandemic appears to be increasing the desire to own a personal mode of transport in many countries. Demand is expected to return to record levels by 2025, providing an incentive for yet more brands to try their luck in Chile. Our model-level forecasts shed more light on this fascinating market.