The economy of Chile is ranked as a high-income economy by the World Bank, and is considered one of South America’s most stable and prosperous nations. However, current economic conditions are putting a drag on overall growth in Chile. One headwind slowing economic growth in Chile is low consumer confidence and a depreciation of the Chilean peso versus the U.S. dollar, which has driven up the cost of imported goods, in particular automobiles. Chile does not manufacture vehicles domestically.
One silver lining offsetting the slowness in the Chilean economy has been low oil prices, which has helped to keep the current-account deficit manageable.
The mining sector in Chile is one of the key pillars of the Chilean economy. Chile has huge copper reserves, producing more than one-third of all global copper output. Chile is very dependent on resource and mineral extractions to be sold in the export market, which has witnessed a decline in demand and subsequent softening of commodity prices.
“There has been a decrease in pickup segment sales, due to the decrease in the economic activity in the mining sector,” said Marcelo Tezoto, South America fleet sales development manager for GM.
The Chilean government strongly supports foreign investment in the mining sector and has modified its laws and regulations to create a favorable investing environment for foreign companies.
The Automotive Market in Chile
Sales of new vehicles in Chile are forecast to slump, shrinking around 16% in 2016 as confidence and growth remain subdued, according to a report by the Asociación Nacional Automotriz de Chile (ANAC).
After automotive sales declined 16% in 2015 to 282,232 units, annual sales of cars in 2016 are forecast to increase to around 290,000 units.
The top-selling car brands in Chile are GM’s Chevrolet, Hyundai, and Kia.
The total number of vehicles in operation in Chile, includign private fleet, is 4,263,084,