Latin America motorcycles market in the first nine months of the 2019 was almost negative with sales at 2.27 million, down 6.8% from the correspondent period last year, despite the two largest markets, Brazil and Colombia grew up in double-digit. Several markets are rally collapsing, including Argentina, Chile and Ecuador.
Latin American GDP will grow 0.7% in 2019, less than expected three months ago and below the rate observed in the previous two years. In addition to the less favorable global context the higher uncertainty on both the political environment and economic policies in most countries of the region will affect economic activity. Growth will rebound moderately in 2020, but will remain below world growth.
Growth will slow down this year in all the economies of the region, with the exception of Colombia where GDP expansion will converge to 3% from 2.8% in 2018. The recession will be more intense than expected in Argentina and GDP will grow less than 1% in Mexico, Brazil and Uruguay. Despite the expected moderation and downward revisions, Peru and Chile show some resilience; in both growth will reach 2.5% in 2019. In 2020 we expect a recovery of growth in practically all the countries of the region, but this rebound will be smaller than expected three months ago.
After a weak 2019, regional growth is expected to regain steam next year. The acceleration will be driven chiefly by a pick-up in Brazil’s economy, thanks to monetary easing and reviving confidence. Growth is also seen accelerating in Chile, Mexico and Peru. However, Argentina is expected to remain in recession amid high inflation and policy uncertainty.
Motorcycles Industry Perimeter
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 economic difficulties actually emerged in several countries are deeply hitting the motorcycles industry in the Latin America. The fact that top markets, like Brazil and Colombia are growing in double-digit, minimize the regional negative outlook. However, when reading data, country-by-country the fall is really impressive.
In the first nine months of the year the new motorcycles sold in the region (Mexico is not included) have been 2.27 million, down 6.8% from the correspondent period last year.
As said, the largest market in the regions is Brazil representing near 28.2% of total regional sales and in the 2019 is fast growing with a double-digit trend, like the second country, Colombia which overtook Argentina which is losing near 50% of 2018 sales volume.
Indeed, a part Brazil and Colombia, all the others 14 markets in region in the 2019 are losing terrain with some, like Chile, Ecuador and the already mentioned Argentina, which are really collapsing and others, like Peru and Guatemala that are losing moderately.