By Carolina Arregoces, Associate, International Affairs, Auto Care Association
If you are interested in increasing your global presence, AAPEX is the best platform to create business relationships and expand into different regions. As the auto care industry becomes more borderless, AAPEX increases its presence in the international automotive community by identifying and promoting international business opportunities for attendees.
One of the regions with the most potential in the current global automotive aftermarket outlook is Latin America. This region has a strong growth rate and unique characteristics that offer great business opportunities for companies in the auto care industry. Thanks to the growth of its four biggest economies — Brazil, Mexico, Argentina and Colombia — Latin America’s GDP is expected to grow 6% in 2020, higher than the Asia-Pacific growth rate of 5.3%.
Why Latin America?
- The United States is the largest trading partner for many Latin American countries, with more than half of all of America’s Free Trade Agreement (FTA) partners. In addition to low- or zero-tariff rates on merchandise, FTAs increase transparency, improve the business environment and reduce market access barriers.
- According to Centralamericadata.com, in the last seven years, Central America has reported a sustained increase in imports of auto parts with an average growth of 6%. The main importer in Central America is Guatemala with $319 million, followed by Panama with $221 million, Costa Rica with $182 million, Honduras with $161 million, El Salvador with $156 million and Nicaragua with $62 million.
- In South America: In 2018, Brazil imported $5.9 billion; Argentina, $2.9 billion; Chile $955 million; Colombia $696.9 million; and Peru $331.9 million. The remaining countries (Venezuela, Ecuador, Bolivia, Uruguay and Paraguay) account for $650.1 million, according to a recent report from WorldsTopExports.com.
- In Brazil, there is approximately one car per four inhabitants, while in Mexico, the ratio is one in three. Argentina, Colombia and Chile are behind in quantity of vehicles, but maintain similar ratios.
- Strong growth in the region and a growing middle class throughout Latin America with increased purchasing power, along with continued investment into infrastructure, promise to increase car ownership.
- The region is characterized by growing and aging vehicle populations that require continuous maintenance and replacement services. Sales of used cars and used imported cars are increasing.
- Vehicles are deteriorating faster and needing more parts for routine maintenance due to the condition of roads, heavy traffic, deficient public transportation and lack of organized traffic flow.
- Annual vehicle inspection programs supporting enhanced government safety and emissions regulations are helping drive more demand for maintenance parts.
- Vehicle owners and service technicians are increasingly turning to internet retailers to meet the demand for parts and accessories not available at their local stores. Latin America ranks second in terms of annual online retail sales growth according to an analysis by Cushman & Wakefield.
- The region is significantly reliant on imported auto parts due to low levels of local manufacturing of aftermarket products.
Recognizing these opportunities, the Auto Care Association has been organizing activities designed to help boost exports to the region. The association has hosted eight successful trade missions in the last three years to key markets in Central and South America. Also, an upcoming trade mission to Peru in 2020 will be announced soon. In addition to these export promotion activities, the association has been organizing a series of technology missions to facilitate the adoption of industry technology standards within key Latin American markets.
In order to take advantage of AAPEX as a well-established space to promote exports and benefit from the above mentioned opportunities, the Auto Care Association is offering U.S. manufacturing exhibitors the opportunity to meet with international buyers and distributors through the association’s international matchmaking program. The program will match U.S. exhibitors to international buyers based on their products of interest and will schedule one-on-one meetings Nov. 5-6, 2019, at the Sands Expo.
If you are interested in increasing your presence in Latin America, AAPEX is the best platform to connect with industry executives, create business relationships and expand business opportunities in the region.