South American Car Sales Hit the Skids

Cars and Drivers

Published: June 23, 2014 11:00 am

Last Updated: April 28, 2020 5:12 am

Source: Volkswagen AG

Over the decade through 2013, new car sales in South America have grown an average of 11% a year, trailing only Asia as the hottest market for new cars. As of April, 2014 sales are down 6.5%, and compared with April 2013, this past April’s sales were down 13.9%.

South American unit sales total 2.09 million through April, down from 2.38 million a year ago. In Brazil, where 60% of the continent’s sales are made, April sales were down 11.7% and year-to-date sales were down 4.6%. But the biggest declines came in Venezuela, where year-over-year sales fell nearly 88% in April and were down nearly 87% for the first four months of 2014. The good news is that Venezuela’s new car sales totaled just 10,192 in April 2013; the bad news is that April 2014 sales slumped to a miserable 1,267. The data are collected and reported by focus2move.com.

Sales in Argentina, the third largest market for new cars in South America, sank nearly 35% year-over-year in April and nearly 19% for the first four months of 2014. The economic situation in the country has deteriorated as it has little access to international capital markets following its 2002 default on $100 billion in loans. A U.S. Supreme Court decision last week added to the country’s woes, allowing to stand a lower court ruling that Argentina must pay bondholders (primarily U.S. hedge funds) that held out when the country defaulted on $100 billion in loans in 2012. Argentina has said it will default rather than pay. The next payment is due June 30.

By model, Volkswagen’s VW Gol remains the market share leader in South America with 4.7% of the total market. For all of 2013 the Gol claimed share of 5.2%. Fiat’s Palio model ranks second in sales through April with a 3.7% share. Ford Motor Co.’s (NYSE: F) Fiesta is ranked third, with 3.5% of the year-to-date market.

General Motors Co. (NYSE: GM) places just one model in the top 10, the Chevy Onix, but places 13 different models among the top 50 selling models on the continent. In 2013 GM claimed 17.5% of the South American market to rank first in sales among all car makers, but it has lost share in each of the past two years.

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