While some countries in commodity-rich Latin America still face challenges due to low raw material prices, many bright spots exist in this diverse and vibrant region. Many opportunities exist in Latin America for North American automotive and heavy-duty products.
Here are some highlights from Latin America in 2014 and forecasts for 2015:
Brazil – Brazil experienced a roller coaster ride in 2014 in the run-up to the re-election of President Dilma Rousseff to a second term. This largest of South America’s economies continues to grapple with inflation pressures. President Rousseff has recently stated that she intends to cut public spending that doesn’t support domestic consumption or investment. Brazil is facing headwinds from higher interest rates, weak external demand, soft commodity prices and subdued consumer and business confidence in 2015.
Mexico – This second largest Latin American market is expected to continue to benefit from its strong links to the U.S. and an anticipated revival of the U.S. economy in 2015. The Mexican economy is expected to accelerate in 2015 and inflation to moderate. Mexico is well positioned for the changing global macro dynamics. Reforms introduced by President Enrique Peña Nieto in telecom, taxation and energy are expected to benefit the country’s economy through higher productivity, increased competitiveness and enhanced investment prospects.
Colombia – In 2014, Colombia was the only country in the region to exhibit a healthy GDP growth rate. However, continued lower mining and oil sector output could reduce Colombia’s GDP growth in 2015.
Peru and Chile – The economies of Peru and Chile are largely dependent on mining and related activity. The sector had been on the decline due to lower commodity prices, but is expected to gradually recover in 2015. While growth may have slowed, Peru and Chile remain strong economies. The Peruvian government cut taxes and increased government spending to boost growth. Peru’s economy is expected to grow 5.1 percent in 2015 while Chile is expected to grow at 3.3 percent in 2015.
The AASA Overseas Automotive Council (OAC) is planning a trade mission to Peru in late March, held in conjunction with the automotive trade show EXPOMECHANICA. The event will provide North American suppliers the opportunity to expand their global outreach into key Latin American markets. For more information on the trade mission and OAC’s other programs and benefits, visit www.oac-intl.org or contact Curtis Draper, OAC executive director, at [email protected] or 919-406-8856.
Editor’s note: Curtis Draper is the vice president of industry analysis, programs and member services at the Automotive Aftermarket Suppliers Association (AASA) and group executive of AASA’s international aftermarket councils: the China Aftermarket Forum (CAF) and the OAC.
The CAF is a consortium of full-service suppliers that meet on a quarterly basis to discuss opportunities within the Chinese aftermarket and to identify ways to address challenges in the growing segment. For more details about CAF programs and initiatives, click here.
The OAC promotes the sale in foreign markets of automotive and heavy-duty products manufactured in North America. Those products include components, accessories, chemicals, hand and power tools, service maintenance and repair equipment, and paint and body supplies for cars and trucks. OAC has more than 350 members in more than 40 countries. More information is available through its Web site, www.oac-intl.org.
AASA exclusively serves manufacturers of aftermarket components, tools and equipment, and related products. It is a recognized industry change agent – promoting a collaborative industry environment, providing a forum to address issues and serving as a valued resource for members.
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