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Uruguay exported more than 16,000 vehicles for US$ 371 million and registered a record at the domestic level
Tuesday, September 17, 2024 - 10:30
Fuente: Volkswagen

Sales of cars and light utility vehicles reached an all-time high in 2023, with nearly 57,600 units sold.

Uruguay's automotive industry reached its highest level of vehicle production in 2022, with more than 19,000 units produced, while domestic sales of cars and light utility vehicles reached an all-time high in 2023, with almost 57,600 units sold.

In addition, almost all vehicle production in Uruguay was exported. Specifically, last year the country exported more than 16,000 units, for a total of US$ 371 million, and the main destinations were Brazil, Argentina and Chile.

The data comes from a report prepared by Uruguay XXI, which highlighted that the automotive sector was one "of those that showed the greatest dynamism in the post-pandemic" and that in the period between 2021 and 2023, the sector represented, on average, 21.4% of total commercial transactions within Mercosur, with transactions totaling US$ 11 billion.

"For the same year, the automotive sector's sales abroad reached almost US$21 billion, which was equivalent to 5% of total Mercosur exports," the report said.

In 2023, the highest value of exports from the auto parts sector in the last four years was also observed, reaching almost US$ 180 million and almost entirely destined for Argentina and Brazil.

THE GROWTH OF THE AUTOMOTIVE INDUSTRY IN URUGUAY

The Uruguayan automotive sector "experienced a singular growth at the beginning of the last decade, when foreign investments were consolidated both in the assembly of vehicles and in the manufacture of auto parts," highlighted the Uruguay XXI report.

Following the announcement by Lifan Motors that it would cease operations in Uruguay in 2021, Uruguayan vehicle production was centralized at Nordex, whose activities focus on welding, cataphoresis, painting and assembly of units for the Citroën, Ford, Fiat, Kia and Peugeot brands.

Along these lines, in 2022 the highest level of production of this century was reached, with a total of 19,620 units produced.

Uruguay XXI highlighted that sales of cars and light utility vehicles "have experienced a significant increase in recent years" and that in 2023 the highest sales record in the last five years was reached with 57,592 units sold.

According to the report, some of the factors that drove this good performance were "lower inflation levels, a stable exchange rate and the recovery of real wages," which stimulated sales in recent times as well as generating "good expectations for investors in the sector."

In this regard, Uruguay XXI highlighted the recent announcement by the Santa Rosa Group of the incorporation of new brands to its portfolio, the arrival of units from the Japanese brand Mitsubishi and the Chinese group Great Wall.

"This favourable outlook was also reflected in the sales figures at the end of the first six months of 2024," a period in which 28,350 units (cars, SUVs, minibuses and utility vehicles) were sold, while in the same period of 2023 there were 25,943 sales transactions.

"If this trend continues, a record could be reached for this segment in 2024," said the Institute for the Promotion of Investments, Exports of Goods and Services and Country Image.

On the other hand, there were regional factors that also impacted the national production of the auto parts sector, such as the floods in Rio Grande do Sul that halted vehicle assembly activities, which affected the production of some auto parts manufacturers in Uruguay, as was the case with the production of airbags.

"Furthermore, competition from regional partners and the push for policies that countries implemented to stimulate the sector created a challenging context," according to Uruguay XXI.

EMPLOYMENT IN THE AUTOMOTIVE AND AUTO PARTS INDUSTRY

As of December 2023, the automotive and auto parts sector employed approximately 4,000 people, 65% of whom were workers engaged in manufacturing auto parts. In terms of gender distribution, female employees accounted for 42% of the total employed staff.

According to data from Uruguay XXI, "employment in the sector increased in the period following the COVID-19 pandemic, accompanying the good production levels of the last three years (the highest since 2015). Likewise, it is estimated that, for each job created, three indirect jobs are generated."

AUTOMOTIVE SECTOR EXPORTS

In terms of foreign sales, the Uruguayan automotive sector exported a total of US$ 550 million in 2023, which implied a decrease of 3% compared to the previous year's figure. Vehicle exports accounted for 68%, while auto parts sales made up the remaining 32%.

Regarding vehicle exports, a total of 16,063 units were sold abroad in 2023, amounting to US$ 371 million. The two destinations that accounted for 86% of sales were Brazil and Argentina, "countries with which Uruguay has economic complementarity agreements that benefit the sector," the report highlighted.

In particular, Brazil was the main destination for these exports, with a total of 11,716 units sold, among which the Ford, Fiat, Peugeot, Kia and Citroën brands stood out. Likewise, in 2023, the Fiat Titano model began to be exported to Brazil and the Peugeot Landtrek model to Chile, whose assembly is carried out at the Nordex factory in Uruguay, the report said.

AUTO PARTS EXPORTS, THE LARGEST AMOUNT IN THE LAST FOUR YEARS

In 2023, auto parts exports totaled US$ 179 million in 2023, which was the highest amount in the last four years.

However, according to Uruguay XXI, the amount exported by the Uruguayan auto parts sector has not yet reached the values it had registered prior to the Covid-19 pandemic.

Exports to Argentina (the main destination) totaled US$ 99 million, while sales to Brazil (the second destination) totaled US$ 68 million.

"The product with the largest share in exports in 2023 was cable harness assemblies and subassemblies, with exports close to US$ 68 million, all destined for the Argentine market. This was followed by airbags and cut leather for upholstery, whose export values reached US$ 41 and US$ 24 million respectively. Almost all of the airbags were destined for Brazil. Regarding upholstery items, Brazil was also the main buyer with a share of 28%, followed by Macedonia (20%) and Mexico (6%)," the report detailed.

Among the companies that had the greatest participation in exports in 2023, the following stood out: Yazaki Uruguay SA. with exports of US$ 67 million, Joyson Safety Systems Uruguay, with sales of US$ 43 million, Bader International with placements of US$ 24 million and Fischer Stainless Steel Tubing Uruguay, with exports of US$ 20 million.

Autores

El Observador