Friday 8 December 2023

Costa Rica New Car Sales Slow Down

In the first half of 2017, the Hacienda (Ministry of Revenue) recorded the entry of 27,315 new vehicles, 10% less than the 30,290 in the same period last year.

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Dollar Exchange

¢528.07 BUY

¢532.94 SELL

7 December 2023 - At The Banks - Source: BCCR

Paying the bills


Chevrolet (Grupo Q) is one of the brands that claims to have had a growth in sales during the first half of 2017. El Financiero / Julieth Mendez

During the first half of this year, some new car dealers claim to have had increases in sales compared to the same period in 2016. However, their results did not prevent an industry slowing down.

According to the General Directorate of Finance (Dirección General de Hacienda) new vehicle imports in the first six months of the year was 27,315 units compared to the same period in 2016 with 30,290 units, a decrease of 10%.

The Directorate stressed that in the first half of this year no 2018 model year vehicles were been imported, contrary to what occurred during the same period last year when the 2017 models were already being brought to the country.

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Last month, Finance Minister Helio Fallas stressed that among the tax revenues, consumption – which includes other goods – fell due to the decrease in the purchase of vehicles.

Representatives of brands such as Toyota, Chevrolet, Ford and Nissan recognize that the auto sector, in general, has experienced a decline and do not visualize that the situation will change in the second part of the year.

Why will not it change?

According to the firms, they will be affected by aspects such as exchange rate volatility, less aggressive financing conditions and a pre-election year.

Impact on tax revenues (left), most sold models (right)

The Brands

Chevrolet, one of the brands distributed by Grupo Q in the country, recorded a 50% increase in sales of its units compared to the previous year. Rodolfo Araya, regional manager of the brand, said that growth is a result of changes in the marketing strategy, the launch of products at the end of 2016 and the expansion of three to six points of sale.

Volkswagen and Ford, brands represented by Grupo Automotriz, showed a performance above the national market average during the first half of 2017.

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“The volatile exchange rate, being a pre-election year and uncertainty about the economy, are all factors that negatively affect the sale of vehicles,” explained Miguel Gorrias, the agency’s marketing manager. “The market will continue downward compared to 2016, but with a rebound towards the end of the year, when the 2018 models arrive.”

Purdy Motor Group, with the Toyota and Lexus brands, is another dealer that reports good results with one of its brands but acknowledges the slowdown in the market.

“In general, the automotive sector has experienced a decrease in sales of 8.3% in the first six months of the year, compared with those achieved in the same period of 2016. For our part, with the Toyota brand, we managed to grow 4% in sales,” said Allan Sime, business director for the dealer.

Nissan by Grupo Danissa, sold 4,000 units during the first half of the year, about 12% less than in the same period of 2016.

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Ana Lucrecia Vargas, marketing director for the brand, mentioned that the drop is influenced by less aggressive financing conditions than in 2016, the fluctuations in the exchange rate stronger than last year and consumer uncertainty.

El Financierio reports it tried to obtain information for the brands Hyundai (Grupo Q), Suzuki and Mitsubishi (Veinsa), as well as, of the Association of Importers of Vehicles and Machinery (Aivema) but got no answers.

Similarly, the financial publication was not able to obtain information from BAC Credomatic, Banco de Costa Rica (BCR), Davivienda and Scotiabank, financial institutions with large portfolios of vehicle loans.

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"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

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