Latin America motorcycles market in the first quarter 2019 felt down 4.9% hit by the sharp fall reported by Argentina and Ecuador and by the slow speed of Mexico. The largest market is Brazil, which counts 28% of the total and is growing in double-digit.
Activity is seen remaining soft this year, picking up only slightly from a dismal 2018, and growth prospects were cut again this month on weak incoming Q1 data. A challenging external environment and political uncertainty are weighing on this year’s outlook. The modest uptick in growth will be driven by slightly stronger growth in Brazil and a smaller drag from Argentina.
In Brazil, the economy is expected to have disappointed again in the first quarter, after a feeble end to 2018. Economic activity, a GDP proxy, dropped in both January and February—raising the risk that GDP growth stumbled in Q1. Industrial output fell at the fastest pace in over two years, in part due to halts in iron ore production.
In Mexico, first-quarter growth fell short of market analysts’ expectations, on the heels of upbeat recent data for January and February. A supply-side breakdown of the first quarter confirmed softness in the industrial sector, which struggled—alongside its stateside counterpart—to find its footing through March.
In Argentina, the still-battered economy continues to wade through macroeconomic rebalancing, on the one hand, and stubbornly elevated inflation and political risk, on the other. Economic activity shrunk less sharply in January−February, although the size of the contraction was severe nevertheless
The Motorcycles Industry
As far as the Latin America two-wheeler market, we actually cover a wide range of 16 countries, Brazil, Mexico, Argentina, Colombia, Peru, Guatemala, Paraguay, Ecuador, Costa Rica, Honduras, Nicaragua, Chile, Uruguay, El Salvador, Panama and Belize. So when reporting data on the region, we mean the total of these countries.
Said this, in all the Latam the motorcycles industry has a relevance both in terms of local production, when thousand people employed, and market, as the two.wheelers still have a key rule as low-cost mobility device for millions people.
There are production plants in Brazil, Colombia, Argentina, Ecuador, Mexico, Guatemala and Paraguay with over 250 manufacturers in competition.
The Market Trend
LATAM region record sales was established in the 2013 with 4.45 million sales, before to decline – mainly due to the crisis which involved the largest market, Brazil, – losing near 1 million units from 2013 to the 2016. Then a slow recovery started with 2018 sales at 3.86 million sales.
In the 2019 the region suffer for the deep crisis which involved Argentina and Ecuador and the first quarter sales at 959.000 units were down 4.9%.
The largest market is the Brazilian representing near 28.2% of total Latam sales with a positive start of the year and sales up 15.7%.
The second market is Mexico with a record of 754.000 units (+8.5%) in the 2018 and a slow trend reported in the Q1 2019.
The third place there is now Colombia which overtook Argentina with Q1 sales up 15.9%, while Argentina is the fourth, with sales down 47.2%.
The fifth market is Peru Q1 sales down 1.2%. In Ecuador (the 7th market) sales are falling down 30%.