| Study Period | 2019 - 2030 |
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 27.28 Billion |
| Market Size (2030) | USD 41.21 Billion |
| CAGR (2025 - 2030) | 8.60% |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order |
South America Automotive Market Analysis
The South America Automotive Market size is estimated at USD 27.28 billion in 2025, and is expected to reach USD 41.21 billion by 2030, at a CAGR of 8.6% during the forecast period (2025-2030).
The automotive industry in South America plays a crucial role in the region's economy, with Brazil and Argentina being the largest automotive markets. Brazil, in particular, is one of the world's top automotive producers and consumers. The country boasts a well-established automotive manufacturing base, with numerous domestic and international automakers operating assembly plants. Similarly, Argentina has a significant automotive manufacturing industry, specializing in the production of passenger cars, trucks, and buses.
Brazil and Argentina have historically been attractive destinations for automotive investments due to their large domestic markets and favorable government policies. However, the industry has faced challenges in recent years, including economic instability, political uncertainty, and fluctuations in demand. Despite these challenges, the automotive industry remains a key driver of economic growth and employment in the region.
There is a significant push for eco-friendly vehicles. Over USD 23 billion (BRL 117 billion) in investments have been announced to produce cars using decarbonization technologies, focusing on hybrids (Anfavea). This highlights a commitment to a greener future.
In addition to Brazil and Argentina, other countries in South America, such as Colombia and Chile, also have burgeoning automotive industries. Colombia, for instance, has seen significant growth in automotive production and exports in recent years, fueled by government incentives and favorable trade agreements. Chile, on the other hand, has a smaller automotive industry but is a key market for imported vehicles, particularly luxury and premium brands.
The future of the automotive industry in South America is closely tied to global trends, including the shift toward electric and autonomous vehicles, as well as efforts to reduce carbon emissions and combat climate change. Governments and industry stakeholders in the region are increasingly focused on promoting sustainable mobility solutions and investing in research and development to stay competitive in the evolving automotive landscape.
South America Automotive Market Trends
Brazil, Argentina, and Mexico to Drive the Market
The automotive market in South America is expected to be driven by Brazil, Argentina, and Mexico due to their large populations, growing economies, and increasing demand for vehicles.
In Brazil, the government has announced plans to reduce taxes on electric vehicles, aiming to increase their adoption. In January 2024, the Brazilian government reduced the tax on electric vehicles from 30% to 15%. Additionally, companies like General Motors and Volkswagen have invested heavily in the country, with GM launching a new production line in São Paulo in March 2023.
In the case of Argentina, the government has implemented regulations to promote the production of electric vehicles, such as tax exemptions and subsidies for manufacturers. In April 2024, the Argentine government announced a new incentive program for electric vehicle production, aiming to attract investments from global manufacturers. Companies like Toyota and Ford have already announced plans to expand their operations in the country.
The Mexican government has established programs to encourage the adoption of electric vehicles, such as a subsidy program for consumers. In June 2023, the Mexican government launched a new program to provide incentives for the purchase of electric vehicles, aiming to reduce emissions and improve air quality. Also, companies like Nissan and Kia have already invested in the country, with Nissan launching a new electric vehicle production line in Aguascalientes in November 2023.
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Electric Vehicles are Expected to Witness Significant Growth
The electric vehicle market in South America is experiencing a surge in growth, driven by a combination of factors. One major reason is the increasing awareness among consumers about the environmental benefits of electric vehicles, leading to a shift in preference toward eco-friendly transportation. Additionally, governments in the region are implementing regulations and incentives to encourage the adoption of electric vehicles, such as tax exemptions, subsidies, and investments in charging infrastructure.
As a result, the market is witnessing a trend of rapid expansion, with new companies entering the fray and existing ones launching new models. For instance,
- BYD, a Chinese electric vehicle manufacturer, entered the Brazilian market in June 2023
- Toyota Argentina will begin producing the Hiace in 2024 at its plant in Zárate, investing USD 50 million and creating new job opportunities in the region. With an annual production capacity of 20,000 units, the plant will meet domestic demand and export to neighboring countries, including Brazil, as part of Toyota's growth strategy in Latin America.
- Chevrolet launched its Bolt electric car in Colombia, and Mercedes-Benz introduced its electric EQS 580 in the region.
Government regulations are playing a crucial role in driving this growth. Colombia, for example, has set a target of having 600,000 electric vehicles on its roads by 2030, while Brazil implemented a tax exemption policy for electric vehicles. Argentina has also announced incentives for electric vehicle production, attracting investments from global manufacturers. These regulations encourage consumers to opt for electric vehicles, attract new investments, and drive innovation in the industry.
The future of the electric vehicle market in South America is promising, with new model launches and investments in charging infrastructure on the horizon. As the market continues to grow, the consumer can expect to see more companies entering the region, new technologies emerging, and a shift toward sustainable transportation. With governments, companies, and consumers all playing their part, the electric vehicle revolution in South America is set to transform the way people move around in the region.
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South America Automotive Industry Overview
Major manufacturers in the South American automotive market include Stallantis, General Motors, Toyota Motor Corporation, Nissan Group, and Volkswagen AG. Between 2021 and 2022, Toyota led the market with more than 73,000 units of new registrations, followed by Volkswagen with 55,000.
- In March 2024, Volkswagen Brazil introduced a rugged version of the new-generation Polo hatchback, reminiscent of the Cross Polo crossover previously launched in India. Unlike its predecessor, the new Polo Track for Brazil features subtle enhancements tailored to appeal to farmers, targeting the agricultural sector with capabilities suited for traversing rough terrain in rural areas.
- In November 2023, Citroen introduced the C3 Aircross, an SUV based on the C3 hatchback, in Brazil. This SUV will retain most of the design elements and features from its Indian-spec counterpart, albeit with a new engine and gearbox option.
- In July 2023, Volkswagen announced its plans for a major product offensive in South America, with the goal of increasing its market share in Brazil by 40% by 2027. The company will launch 15 new electric and flex-fuel vehicle models by 2025 and follow up with hybrid vehicles in the medium term. The first fully electric models are the Volkswagen ID.4 and ID. Buzz was expected to be available in Brazil before the end of 2023.
South America Automotive Market Leaders
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General Motors
-
Stellantis NV
-
Renault Group
-
Volkswagen AG
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Toyota Motor Corporation
- *Disclaimer: Major Players sorted in no particular order
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South America Automotive Market News
- March 2024: Car manufacturers made announcements suggesting investments exceeding BRL 117 billion (USD 23.48 billion) in Brazil, primarily directed toward the production of vehicles equipped with decarbonization technologies, with a particular focus on hybrid models.
- February 2024: According to representatives from the National Association of Automobile Manufacturers (Anfavea), the Brazilian automotive industry is set to receive a substantial boost, with investments totaling USD 20 billion (BRL 100 billion) anticipated by 2029.
- July 2023: In Argentina, the government announced that it anticipates the inauguration of its inaugural lithium-ion battery plant by September, utilizing locally extracted and processed lithium carbonate provided by US mining company Livent Corporation.
South America Automotive Industry Segmentation
The South American automotive industry encompasses the production, sale, and usage of vehicles within the countries of the region.
The South American automotive industry is segmented by vehicle type (passenger cars, commercial vehicles, and two-wheelers), fuel (diesel, gasoline, electric vehicle, and others), and country. It includes various types of vehicles, such as passenger cars, commercial vehicles (including light commercial vehicles, heavy commercial vehicles, and buses), and two-wheelers (including motorcycles and scooters).
The report offers market sizes and forecasts for the South American automotive market in terms of value (USD) for all the above segments.
| By Vehicle Type | Passenger Cars |
| Commercial Vehicles | |
| Two-wheelers | |
| By Fuel Type | Diesel |
| Gasoline | |
| Electric Vehicle | |
| Other Fuel Types | |
| Country | Brazil |
| Argentina | |
| Chile | |
| Peru | |
| Rest of South America |
By Vehicle Type
| Passenger Cars |
| Commercial Vehicles |
| Two-wheelers |
By Fuel Type
| Diesel |
| Gasoline |
| Electric Vehicle |
| Other Fuel Types |
Country
| Brazil |
| Argentina |
| Chile |
| Peru |
| Rest of South America |
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South America Automotive Market Research FAQs
How big is the South America Automotive Market?
The South America Automotive Market size is expected to reach USD 27.28 billion in 2025 and grow at a CAGR of 8.60% to reach USD 41.21 billion by 2030.
What is the current South America Automotive Market size?
In 2025, the South America Automotive Market size is expected to reach USD 27.28 billion.
Who are the key players in South America Automotive Market?
General Motors, Stellantis NV, Renault Group, Volkswagen AG and Toyota Motor Corporation are the major companies operating in the South America Automotive Market.
What years does this South America Automotive Market cover, and what was the market size in 2024?
In 2024, the South America Automotive Market size was estimated at USD 24.93 billion. The report covers the South America Automotive Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the South America Automotive Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.
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