Latin America motorcycles market has lost near 20% of volume in the first eight months 2020. The regional data, which includes 16 countries, are moderately recovering after the deep -54% reported in the Q2, although the annual balance will be widely negative.
The economic outlook for Latin America, which is now the global epicenter of the coronavirus pandemic, was downgraded yet again this month. Lockdowns at home and the global recession will pummel economies through various channels including lower trade, commodity prices, tourism activity, remittances and domestic demand.
Inflation in Latin America inched up to 5.9% in June from 5.8% in May, which had marked a two-year low. Higher inflation in Brazil and Mexico, mainly owing to recovering energy prices, drove the uptick. Economic slack has kept inflation broadly in check in most countries. Regional inflation is expected to ease from current levels going forward, largely on muted demand.
The central banks of Brazil, Colombia and Mexico slashed their policy rates yet again in recent weeks in a bid to further shield their economies from the Covid-19 fallout. Meanwhile, policymakers in Chile and Peru opted to leave benchmark rates steady at their multi-year lows. Central bankers overall are seen cutting rates further by year-end.
The vast majority of the region’s currencies lost ground against the USD over the past month, with the Brazilian real especially battered due to the alarming state of soaring Covid-19 cases in the country. The Colombian peso was the only currency which strengthened against the greenback. Currencies are projected to weaken much more sharply this year compared to 2019.
Motorcycles Industry Perimeter
As far as the Latin America two-wheeler market, we actually cover a wide range of 16 countries, Brazil, Bolivia, Argentina, Colombia, Peru, Guatemala, Paraguay, Ecuador, Costa Rica, Honduras, Nicaragua, Chile, Uruguay, El Salvador, Panama and Belize. So when reporting data on the region, we mean the total of these countries.
Said this, in all the Latam the motorcycles industry has a relevance both in terms of local production, when thousand people are employed in the industry, and market, as the two-wheelers still have a key rule as low-cost mobility device for millions people.
There are production plants in Brazil, Colombia, Argentina, Ecuador, Guatemala, Uruguay and Paraguay with over 250 manufacturers in competition.
The economic difficulties actually emerged in several countries are deeply hitting the motorcycles industry in the region.
The fact that top markets, like Brazil and Colombia are growing in double-digit, minimize the regional negative outlook. However, when reading data, country-by-country the fall is really impressive.
Following the already negative data reported in the 2019, with regional sales at 3.2 million, down 6.5% the 2020 is widely negative. Sales in the first quarter were in line with the previous trend (-5.3%) while the covid 19 spread pushed sales down 55.1% in the second quarter, with the first half 2020 closed at 1.014 million units, down 28.7%.
In the first part of Q3, sales are marginally recovering, with July reported up 5.5% and August up 7.1%. However, year to date August figures are 1.54 million, (-19.2%).
The model featured in this articles, the Honda CG 160 Fan 2020 is the best-selling model in the region.