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Car fever in Chile: more money on the street and a historical sales record

Chile is experiencing a real car fever: in September alone, more than 42,600 new vehicles were sold, a record figure that represents an increase of 33.6% compared to the previous year and which led dealers to have waiting times for the deliveries of up to four months.

The perception that the end of the pandemic and the great liquidity of money that are in the street, would explain this historical “boom”, according to experts.

“What we have seen in recent months is a very marked recovery in the sales of new vehicles, practically in all segments: passenger, pick-up trucks, commercial”, explained Diego Mendoza, secretary general of the Chilean National Automotive Association (ANAC).

September, he added, “is the best-performing month in the history of Chile, even surpassing September 2018,” with 39,200 vehicles sold.

According to the latest Customs report, passenger car imports reached 2,891.8 million euros so far this year, an increase of 111.8% compared to the same period last year.

A car dealership in Santiago, Chile, this Friday. Photo: EFE

“We can’t cope and there are days when we have to work overtime,” Valentina Gómez, a salesperson at a concessionaire in the eastern part of the capital, told EFE.

Euphoria for the used ones

The euphoria also infects the second-hand market and there are many citizens who dare to sell their cars, attracted by the high profits they can get.

This is the case of Felipe Castellanos, who wanted to sell his car two years ago, but in the end he backed out because he was very old and they only gave him 2.5 million pesos (about $ 3,000). Two months ago, he managed to place his 2007 Mitsubishi Galant for an additional 2 million pesos ($ 5,500).

Joaquín Martínez has no doubts either: “I bought my Rav4 2021 for 17 million pesos and I am negotiating to sell it for 21 million pesos. There is a worldwide shortage,” he told EFE.

Chile, one of the countries with the highest vaccination rate in the world and with the pandemic controlled since August, lived extensive quarantines since the beginning of the pandemic, especially in 2020, where almost the entire country was confined for almost four months.

In the hardest moments of the health emergency (June, July and August of last year), with the economy closed tight, there were minimal records of car sales and barely 9,000 were sold per month, according to ANAC.

Due to the pandemic, many Chileans stopped traveling on public transport and started using the car.  Photo: EFE

Due to the pandemic, many Chileans stopped traveling on public transport and started using the car. Photo: EFE

Fear of public transportation

The pandemic caused a change in the behavior of Chileans, which they stopped using public transport more than in other parts of the world and, after the confinements, “people returned to specify all the purchase options that they had postponed during the past year with great force, especially in the last five months,” Mendoza said.

“There is a delay in delivery times. Chile is not a vehicle producing country and its logistics chain is stressed. Waiting times are oscillating between 30, 60 and 90 days and up to four months in the more specific models,” he added the executive.

The explosion in car sales is set against the backdrop of the accelerated recovery of the Chilean economy, which contracted by 5.8% in 2020 the worst fall in four decades and will close this year with growth of between 10.5% and 11.5%, according to Central Bank estimates.

The recovery was marked by levels of liquidity never seen before due to the reactivation of employment, state aid to face the crisis, totaling close to 30,000 million dollars, and early withdrawals of pension funds approved by Parliament (50,000 millions).

The automotive industry, however, is cautious and believes that the euphoria will dissipate: “Our projections for this year are 395,000 to 405,000 cars, in line with a normal year and far from the 417,000 sold in 2018,” concluded Mendoza .

Source: EFE



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