Frost & Sullivan offers LatAm passenger vehicle outlook

SAN ANTONIO, Texas — Despite the automotive market's current boom times in Mexico, that sector declined overall in Latin America in 2016, according to research firm Frost & Sullivan, but is expected to rebound.

A report published March 16 by the San Antonio-based company on the Latin American passenger vehicle market outlook for 2017 notes that digital transformation is “expected to propel growth across the entire automotive value chain,” with the result pushing sales volumes upwards of 5 million units.

Frost & Sullivan said that senior management and CEO-level executives in the Latin American automotive value chain cited “as-a-service” models — focusing on the future of connected cars and harnessing “big data” to better serve consumers — as the two biggest themes and top-of-mind-issues in the passenger vehicle market today in that region.

However, it added, the Latin American automotive market declined by about 3.5 percent in 2016 to account for just below 5.0 million units.

While Brazil witnessed a decline of almost 20 percent, dropping below the 2.0 million units mark, Frost & Sullivan reported that Mexico had a record year, producing more than 1.6 million vehicles. In addition, Argentina and Chile “returned to the growth trajectory” in 2016.

Competition for the top spot among vehicle-producing countries intensified in 2016, it said, and the year witnessed a number of market share changes while also marking a key trend of shifting away from cars and towards SUVs.

As a part of its outlook study, Frost & Sullivan said it identified the key disruptive trends that will shape 2017 in the Latin America passenger vehicle market, including:

• Digital transformation of the industry;

• Technology innovation and regulations;

• Growing vehicle segments;

• The start-up boom in Latin America;

• OEMs entering the mobility landscape;

• Market differentiators, including standard and advanced vehicle features;

• Used cars; and

• eRetailing and how it will change the face of the aftermarket.

The study, available from the firm for $4,950, analyzes and presents forecasts for Argentina, Brazil, Chile, Colombia, Mexico and Peru by original equipment manufacturer (OEM) and market.

“Over the last few years in (Latin America), the automotive market has also witnessed immense disruption and changes to traditional structure,” Frost & Sullivan's report stated. “The study identifies some of these key companies to watch in 2017 — that is, Canal da Peça, Itaro, EasyCarros, InstaCarro, Sirena, Moovit, plus 10 others.

“These companies represent a defining business model that has a unique perspective, strength of vision, and that are extremely innovative, thus improving the entire automotive industry,” the firm said.

The angle of digital transformation impacting the automotive industry also is discussed in the report via trends and case studies in Latin America. The firm said “deep-dives” provide outlook and disruptive trends for vehicle powertrain technologies, electric vehicles, connected cars, vehicle features, advanced driver assistance systems (ADAS), urban mobility and the aftermarket in Latin America, and the study then concludes with key predictions for 2017.

Key issues answered in the study, according to Frost & Sullivan, include:

• The 2017 market growth forecast, and in which countries key movement is expected;

• Major advancements emerging concerning powertrain, electric vehicles, connected cars, ADAS and in-vehicle features in the Latin America region;

• The top disruptive trends in the region and how digital transformation will affect the market landscape; and

• What the new business models and market strategies for sustainable growth will look like.