Chile Auto Market Briefing & Trade Mission - Auto Care ...
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4/20/2018
Chile
Auto Market Briefing &
Trade Mission
Webinar – April 19, 2018
Welcome
Kellie Holloway, Sr. International Trade Specialist, U.S. Department of Commerce
Exploring New Markets in Latin America
Angela Chiang, Director International Affairs, Auto Care Association
Chile Market Briefing: Business Overview
Agenda James McCarthy, Commercial Counselor, U.S. Commercial Service Chile
Claudia Melkonian, Commercial Assistant, U.S. Commercial Service Chile
Automotive and Aftermarket Overview – Chile
Hernan Quezada, President, Automotive Aftermarket Chilean Chamber of
Commerce ‐ CAREP
Rodrigo Perez, Director, Automotive Aftermarket Chilean Chamber of Commerce
‐ CAREP
Trade Mission Benefits
Carolina Arregoces, Associatte International Affairs, Auto Care Association
Q&A
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4/20/2018
The U.S.
Commercial Service
assists and advocates for
U.S. businesses in
international markets to
foster U.S. economic
President prosperity.
Vice Enforcement Industry
Clients
President & &
Cabinet Compliance Analysis
U.S. COMMERCIAL SERVICE
GLOBAL PRESENCE
Overseas, we’re part of U.S.
Embassies and Consulates
worldwide; in countries
where U.S. business needs us
most. 128 International
Offices in 75 countries
account for 96% of world
export markets.
KEY RSCOs, SCOs, PCOs, HoS
Partnership Posts
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U.S. COMMERCIAL SERVICE
DOMESTIC PRESENCE
We have over 100 Export
Assistance Offices in the
United States.
What is the Auto Care Association?
The Auto Care Association has nearly 3,000 member
companies, accounting for approximately 150,000 facilities
and locations that manufacture, distribute and sell motor
vehicle parts, accessories, tools, equipment, materials and
supplies, and perform vehicle service and repair.
3
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• Government Affairs / Advocacy
• Education
• Technology / E‐Commerce Standards
Programs &
• Market Intelligence
Resources
• Communications Resources
• International Growth / Business
Development
Exploring New Markets in Latin America
• Award from U.S. Department of Commerce to promote
exports
• Successful trade missions in 2016 and 2017:
Guatemala, Peru, Colombia, Honduras and Nicaragua
• More than half of all of America’s FTA partners are in
Latin America
• More than 40 % of U.S. exports go to Latin America
• High level of used‐car sales and used‐vehicle imports
• Aging vehicle population
• Proximity and demand
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FTA Benefits
• Under the FTA’s with Latin America, most auto parts
enter tariff‐free
• Eliminates regulations that restrict international trade
• Strengthens protections for investments and property
• Facilitates and harmonizes customs procedures
• Establishes procedures for resolving disputes
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CHILE MARKET BRIEFING:
BUSINESS OVERVIEW
AUTO CARE TRADE MISSION
James McCarthy
Commercial Counselor
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Why Do Business In Chile?
26 Trade Prudent Fiscal Stable
Agreements Policies Democratic
Government
Solid Business
Practices Rule of Law/ Low Corruption
Low Corruption
12
CHILE: Bigger Than Meets the Eye
Chile’s Mining and Agricultural Export Industries
Generate large demand for imports
35th largest export economy in the world
Chile’s GDP and Population
In 2016, positive trade balance of $1.53 B
Chile is the largest Latin American investor in Brazil
40th largest importer in the world & 21st largest market
for U.S. exports
Population- 18 million March 2018
89.7% of the population is urban
Chilean companies are regional companies:
LATAM (largest airline Falabella (retail)
in Latin America) Sonda (ICT)
Cencosud (retail)
Corpbanca (banking)
Arauco (forestry)
Salfa Corp (construction)
Detroit Chile
(shipbuilding) The two largest retailers in
Latin America are Chilean
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13
Chile’s Competitive Advantages
• Most competitive • 20th freest economy in
economy in Latin the world according to
America: WEF Global Heritage Foundation 2018.
Competitive Index 2016-
2017. • Ranks 55th out of the 190
countries in the 2018
• Most innovative country Doing Business report
in South America: 2016 issued by the World Bank
Global Innovation Index of
the World Intellectual
Property Organization and
INSEAD Business School.
14
Challenges
• High energy costs Global Competitiveness Index 1-7 (best):
• More rigorous permitting
process and environmental
enforcement have paralyzed or
delayed energy and mining
projects
• Education: Improve K-12
programs
• Income inequality of salaries
• English as a second language
World Economic Forum, (http://reports.weforum.org)
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4/20/2018
15
CHILE: Leader in Free Trade Agreements
FTAs: CEAs:
Canada 1997 Bolivia 1993
Mexico 1999 Venezuela 1994
Central America 2002 Mercosur 1996
European Union 2003 India 2006
South Korea 2004 Cuba 2008
United States 2004
Ecuador 2010
Euro. Free Trade Assoc. 2004
Trans-Pac. Partnership 2005
China 2006
Japan 2007
Panama 2008
Colombia 2009
Australia 2009
Peru 2009
Turkey 2011
Malaysia 2012
Thailand 2013
Vietnam 2014
Hong Kong 2014
March 8, 2018: Chile and10 other countries signed
the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP) or TPP-11, which
will slash tariffs among member nations by 2019.
16
U.S. Companies Invested in Chile
Walmart
Pensions
Acquired Chile’s largest supermarket
Acquired Interamericana de
chain, LIDER
Seguros
Aramark Air Products
20,000 employees in Chile Acquired Indura
AES Corp/Gener Google
Data center
2nd largest electricity generator
UH6 Banmedica
Sempra Energy
Electricity generator
Freeport-McMoRan
Investments like these and others tend
to inspire even more confidence in the
Copper & gold mining
Chilean economy.
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4/20/2018
17
U.S. – Chile Free Trade Agreement
Signed into effect January 1, 2004
Celebrated 14th anniversary in January
2017
All exports of consumer and
industrial products can now enter
Chile duty free
Otherwise, the standard import tariff is 6%
Stronger protection of intellectual
property rights (IPR)
Open and fair government
procurement (www.chilecompra.cl)
Bilateral trade has increased 340%
(reports similar increase)
Trade surplus in goods ($3 Billion)
18
U.S. Chile Trade in Merchandise/Goods
(In US$ Billon)
20 18.9
17.6
18
16.6
15.9
15.5
16
13.6
14 12.9
12.1
12 10.9 10.6
10.3
9.6 9.4 Imports from Chile
10 9.1 9.4 9.4
9 8.9 8.8
8.3 8.2 Exports to Chile
8 6.8 7
6.7 6
6 5.2
3.7 4.7
3.6
4
2.7
2
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. Department of Commerce, Bureau of the Census (www.census.gov)
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4/20/2018
19
Best Prospects for U.S. Exports
Automotive Parts
• Total Imports: U.S.: $707 million
• Imports from the U.S.: US$156 million
• Chilean market has over 60 brands from various countries.
Nevertheless, U.S. auto parts are still leading the market and
account for approximately 30% of the auto parts imported by Chile.
• Light vehicle parts: best prospects include engine components,
clutches, mufflers, tires, catalytic converters, lights, gearboxes, air
filters, brake components and windshields.
• Heavy vehicles parts: American brands are the top sellers. Best
prospects include engine kits, differential gears, clutches, rings,
accessories, lights, pneumatic suspension systems, batteries, filters
and oil.
• For additional information contact: claudia.melkonian@trade.gov
20
Contact Us Today
To Connect With A World of Opportunity
U.S. Embassy – Santiago, Chile U.S. Embassy – Santiago, Chile
U.S. Department of Commerce U.S. Department of Commerce
Tel: +56-2-2330-3310 Tel: +56-2-2330-3312
www.export.gov/chile www.export.gov/chile
James McCarthy, Commercial Counselor Claudia Melkonian, Commercial Assistant
james.mccarthy@trade.gov claudia.melkonian@trade.gov
104/20/2018
Automotive and
Aftermarket Overview
Chile
Automotive Aftermarket Chilean Chamber of
Commerce - CAREP
Hernan Quezada, President
Rodrigo Perez, Director
Chile Vehicle Market in 2018
Passenger Van/Mini
Motocicletas Pickup Trucks Bus Truck Trailers Tractors
Cars/SUV Van
540.000 3.443.418 1.024.366 274.575 93.379 244.313 78.631 8.540
Total Passenger 5.282.359 Total Commercial 424.863
Total 5.707.222
Source: INE – Parque Automotriz 2016 + ANAC 2017
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Important Aspects To Consider
Small economy, very dependent on commodities markets
Extremely Open Market with no trade barriers and no atidumping against Asian
manufacturares
Intense competition and consumers are high sensitivity to price
Wide variety of vehicle brands and models
Small share of vehicles and parts manufactured in the US
WWW.CAREN.CL
Franchise models are not developed yet in this industry
Passenger Car/Pickup & SUV Market
Evolution by year
Market Share by Brand in 2017
Sales by Segment
**ANAC Jan 2018
124/20/2018
Top Selling Models 2017
**Anac Enero 2018
25
Truck Market
Evolution by year Existing Base Market Share
by Brand (12/2017)
2017 Sales by Brand
**Anac Enero 2018 **Base Vehiculo 1990 ‐ 2017
134/20/2018
Bus Market
Evolution by year Existing Base Market Share
by Brand (12/2017)
2,7K
2017 Revenues by Type
**Anac Enero 2018 **Base Vehiculo 1990 ‐ 2017
Market Sizes for Aftermarket Business Opportunities
Market value for parts is aproximately USD500 million/yr. in Passenger Market, and
USD 350 million/yr. in Commercial Vehicles
Lubricants market for vehicles is aproximately 120 million lts/yr. Equivalent to USD
180 million/yr.
Tire market for PCR/LTR is 4 million units/yr. and USD 200 million, TBR market is 1
million units/yr and about USD 150 million/yr. (Both markets are highly dominated by
Chinese Brands)
144/20/2018
Take the First Step –
Participate in a Trade Mission
• Business development opportunity supported by the U.S.
Embassy to explore the market
• Successful trade missions in 2016 and 2017
• One‐on‐one meetings with pre‐screened, prospective
customers and partners
• Access to key industry contacts, exposure to the local market
• Smaller, automotive specific delegation for customized
assistance
Trade Mission to Chile| Aug. 21‐22
• Personalized one‐on‐one meetings through the U.S.
Commercial Service
• Country & industry briefing by the U.S. Embassy
• Hotel accommodations, airport transfers and local ground
transportation.
• On‐site interpreters
• Meals
• Networking reception
• Conference call with U.S. Embassy specialist to review
specific goals/objectives
154/20/2018
Trade Mission to Chile| Itinerary
Tuesday, August 21:
Delegation arrives in Santiago, Chile
Welcome U.S. Embassy country briefing
Wednesday, August 22:
Personalized business‐to‐business meetings
Networking reception
Thursday, August 23:
Participants return to the United States
Trade Mission | Costs
Cost After Offset
Auto Care Association Members $ 4,100 $ 2,600
Non‐Members $ 4,600 $ 3,100
Each Additional Participant
$ 500
Members
Each Additional Participant Non‐
$ 600
Members
MDCP Award Offset* $1,500
164/20/2018
Register Now
Step 1: Register at www.autocare.org/trade‐missions
Step 2: Preliminary feedback from commercial specialists in
country
Step 3: Notification on qualification
Step 4: Once payment is received, we will start working on
your meetings
DEADLINE: June 29, 2018
Testimonials
“Meetings were well planned with the right type of companies that we could potentially do
business with. Staff did a fantastic job taking care of all of our needs”
APW Knox‐Seeman Warehouse
“For a small company like us, we do not have all the resources to organize a fact‐finding
mission ourselves. Through Auto Care’s trade mission, the U.S. Embassy requested meetings
on our behalf, automatically boosting our credibility as a legitimate company.”
Murray Corporation
“Having the opportunity to meet with the leading companies in the automotive industry has
opened a wide range of business venues we were long due to achieve.”
Herko Automotive Group
“The team did a magnificent job of setting up productive meetings with local businesses
which are eagerly ready to create business relationships with our U.S. organization.”
Aftermarket Auto Parts Alliance
174/20/2018
Questions? Thank you!
Claudia Melkonian
Commercial Assistant
U.S. Embassy – Chile, U.S. Department of Commerce
claudia.melkonian@trade.gov
Kellie Holloway
Sr. International Trade Specialist
U.S. Commercial Service, U.S. Department of Commerce
kellie.holloway@trade.gov
Carolina Arregocés
Associate, International Affairs
carolina.arregoces@autocare.org
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