OEMs' significant investment in artificial intelligence and advanced features will boost growth opportunities, finds Frost & Sullivan's Mobility team
SANTA CLARA, California, May 2, 2018 /PRNewswire/ -- Digital transformation, Industry 4.0, and connectivity are reshaping the future of the Latin American (LATAM) automotive industry. Digital solutions are being aggressively pursued due to high demand for greater transparency, speed, customer satisfaction, security, production, and mobility optimization, as well as large and fierce original equipment manufacturer (OEM) competition. Frost & Sullivan anticipates growth opportunities in areas such as online retailing for new and used cars and mobility services, improving quality of life in mega cities.
Frost & Sullivan's recent analysis, Latin American Passenger Vehicle Market Outlook, 2018, finds that in 2017, annual sales accounted for 5.31 million units and are expected to reach over 5.8 million units in 2018. The study identifies growth factors, key trends, developments in the connected car market, and drivers to success across segments, including cars, sport-utility vehicles (SUVs), pickups, and light commercial vehicles. It focuses on selected LATAM countries, including Argentina, Brazil, Chile, Colombia, Mexico and Peru. Competitive benchmarking analysis is done by fuel type, powertrain, OEMs, and online and mobile app participants, such as InstaCarro, Kavak, Moovit, and OnBoard Mobility Brazil.
For further information on this analysis, please visit: http://frost.ly/2fp
"With the increasing internet and smartphone penetration in the region, OEMs are disrupting the way they connect with customers and focusing on offering eCommerce platforms and new service models. OEMs must develop artificial intelligence, Industry 4.0, and advanced features to improve productivity and enhance upselling service possibilities," said Yeswant Abhimanyu, Mobility Research Manager at Frost & Sullivan.
Abhimanyu predicts that the development of applications to leverage data collected from on-road vehicles will unlock growth opportunities for data monetization as service providers aim to deliver innovative predictive maintenance solutions.
Regional trends transforming the Latin American automotive sector include:
- Mexico, Brazil, Colombia, and Argentina continuing to work with local governments in the development of electric and hybrid vehicles through import tax reductions and the expansion of charging infrastructure;
- Colombia and Peru focusing on renewing their aging vehicle parc;
- Increased interest in SUVs in Colombia, Chile, Argentina, Mexico, Brazil and Peru;
- Significant increases in ride hailing as this service is legalized;
- Mexico and Brazil investing in Industry 4.0 to increase production utilization rates and strengthen their position as regional and global exporters; and
- Argentina working on growing vertical integration as well as becoming a regional and global hub for pickup production.
"Domestic currency devaluation against the US dollar is a big challenge for most LATAM markets that are heavily dependent on vehicle imports or auto parts for vehicle assembly, such as Argentina or Colombia," noted Abhimanyu. "To mitigate this challenge, companies, together with local governments, are investing in the development of local Tier 1, 2 and 3 suppliers."
Global Automotive Industry Outlook, 2018 is part of Frost & Sullivan's Automotive & Transportation Growth Partnership Service program.
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Latin American Passenger Vehicle Market Outlook, 2017
SOURCE Frost & Sullivan