In the west of South America, Peru is attracting the world's attention with its unique charm. This country not only has the ancient and mysterious remains of the Inca civilization, but also continues to show vitality in the economic field. Its automobile market presents a different picture. Today, let us take a deeper look at the Peruvian automobile market.
Market size and growth trends
The Peruvian auto market has gradually expanded in recent years, and the domestic car ownership has now reached 4.83 million. With the development of the economy and the acceleration of urbanization, the demand for the auto market has also continued to rise. According to relevant data forecasts, by 2025, the total sales volume of the Peruvian auto market is expected to reach about 500,000 vehicles, including about 400,000 passenger cars and about 100,000 commercial vehicles, which will be nearly three times the current market capacity.
Looking back, in the first nine months of 2023, Peru sold 127,890 light vehicles, an increase of 6.55% compared with the same period in 2022. However, heavy commercial vehicles sold only 12,881 units from January to September, a year-on-year decrease of 6.3%. From the overall sales trend, although there is growth, there are also unstable factors. Peru's professional department analysis believes that the decline in private investment and the continued uncertainty of business expectations may affect the further growth of final sales in 2023.
Brand competition landscape
There are many participants in the Peruvian automobile market, including internationally renowned automakers such as Toyota, Honda, Volkswagen, and Ford, as well as some local automakers such as Automotrices del Peruano (APM). In terms of market share, there is fierce competition among brands. Among the 25 mainstream automobile brands, brand preferences have not changed much over the years. The top ten brands are Toyota, Kia, Hyundai, Chevrolet, Changan, Dongfeng Xiaokang, JAC, Nissan, Suzuki and Volkswagen.
In terms of market segments, in the sedan sector, the top ten brands accounted for 93.5% of sales, with Kia, Toyota and Hyundai firmly in the top three; the SUV market was highly differentiated, with the top ten mainstream brands accounting for 63.2%, with Toyota, Kia and Hyundai also in the top three; in the pickup truck sector, the top ten brands accounted for 82.1%, with Toyota, JAC and Ford at the top; in the VAN vehicle market, the top ten brands accounted for 85.8%, with Changan, Toyota and Chevrolet leading the way.
It is worth mentioning the performance of Chinese brands in the Peruvian market. In 2007, Chinese auto brands sold only 1,618 vehicles in Peru, accounting for 3% of the total market sales. But since then, it has been advancing by leaps and bounds. By 2022, there are 12 Chinese brands in the Peruvian auto market, second only to Chile in Latin America, and the light vehicle market share has reached 26.3%, and the gap with Japanese and Korean brands is narrowing. In June 2023, the sales of 6 Chinese auto brands accounted for 20.6% of the total sales in the Peruvian market, and Changan, Dongfeng Xiaokang and JAC Motors ranked among the top ten in light motor vehicle sales.
Consumer preferences
From the perspective of vehicle model preferences, the Peruvian market has unique characteristics. In the light vehicle market, SUVs account for nearly half of sales, with a share of 45.2%, far exceeding other models. Although sedans account for 21.1% of market capacity, it has decreased by 4.6% year-on-year. At the same time, commercial vehicle sales have declined, indicating that Peru's demand for private travel vehicles has declined. Pickup trucks and light transport vehicles (including VANs and small trucks) account for a total of 33.7%, indicating that consumers prefer multi-purpose vehicles, which is also a significant feature of Peru's automobile markets that is different from other Central and South American countries. Overall, SUVs, VANs and pickup trucks account for about 80% of the light vehicle market share.
In terms of price, due to the relatively low spending power of Peruvian consumers, they prefer to buy economical cars with lower prices. Judging from the public market MRSP, Peruvian car prices are relatively affordable. In addition, China and Peru have signed a regional cooperation agreement, and Chinese vehicles entering Peru enjoy preferential tariff-free treatment, which also makes Chinese brand cars more competitive in terms of price.
