After vehicle sales practically disappeared due to the decreed quarantine, the distributors in El Salvador begin to notice an incipient reactivation of the market, which is explained by the demand for units for commercial use.
Months ago CentralAmericaData predicted the behavior that is currently confirmed by vehicle distributors in El Salvador.
Making alliances with factories, applying distance protocols at points of service and encouraging the use of digital platforms are some of the strategies that have begun to be implemented by new vehicle distributors in the region.
Managers of Grupo Q, a company that operates 40 salesrooms in Central America, explained that given the spread of covid-19 and the restriction of consumer mobility, they are working to deepen alliances with factories and achieve a comprehensive chain of savings in different areas.
In the first five months of the year nearly 36 thousand vehicles came into the country, 26% more than in the same period in 2015 and 24% more motorcycles.
Of the 35,690 vehicles that entered the country between January and May 2016, 72% were new units, and the rest were used.In the same period, the country imported 32 thousand new motorcycles.
Grupo Q is investing $5 million in the construction of an automotive center of 4 thousand square meters, including an exhibition area and vehicle sales, parts and maintenance service area.
Representatives of the distributor of Nissan and Chevrolet, whose headquarters are in El Salvador, believe that the economic growth seen in Nicaragua in recent years has led to the arrival of new investments in different productive sectors.
The tax exemption enjoyed by these vehicles is one of the factors driving their sales in the country, where three agencies are now marketing them and two are preparing their market entry.
Dealerships that have ventured into selling hybrid vehicles in recent years say the rise in sales is mainly due to these types of cars being exempt from vehicle restrictions in force in the country and because they only pay 10% of the selective consumption tax instead of 30% paid by conventional vehicles.
The country's economic growth is attracting new companies looking for space in a market that expects to sell over 15,000 new cars in 2014.
Automotive companies are planning significant investments in order to meet demand from Nicaraguan customers. Grupo Q will invest $12 million in 2014 mainly in infrastructure.
The Nicaraguan Association of Motor Vehicle Dealers (Andiva) has stated that "the goal is 15,225 units this year in sales from the distributors that make up the Nicaraguan Association of Motor Vehicle Dealers (Andiva)."
Distributors expect that at the end of 2013 a record will be broken when they register sales of 14,000 new cars.
Laprensa.com.ni reports: "The stabilization that the industry has experienced in recent years has been driven in part by attractive financing rates and the various marketing strategies which have been carried out."
One of the strategies is the trade sector fair Andiva Motor Show produced annually by the Nicaraguan Association of Automotive Vehicle Dealers (Andiva). In 2013 the sector expects 5% growth in sales, reaching 14,500 new vehicles, said Rafael Lacayo, president of Andiva.
Grupo Kaufmann from Chile, a distributor for Mercedes Benz, is negotiating the purchase of Grupo Q’s operations in Panama.
"The negotiation is in the preliminary stages", said Kaufmann Group’s CEO, Alexander Kohler, in an article in the Chilean newspaper Estrategia, reported Prensa.com.
Once the agreement has been finalized, Kaufmann’s operations will follow the same model used in Chile, with sales of cars, buses, trucks and vans.
Grupo Q claims that it has won first place in Costa Rica, with its sales of the Hyundai brand, but Purdy Motors, with the Japanese Toyota says it maintains its leadership in sales.
The engines are roaring with contention after the importer Grupo Q, from El Salvador, announced that with its auto sales of the Korean brand Hyundai in 2011, it has become the number one seller in Costa Rica.
Credi Q and Grupo Improsa are planning a second round of bond issues backed by future loan payments for vehicles purchases.
In June, the companies placed two series of bonds with collateral supported by future payments from its vehicle purchase loan portfolio. The securities were acquired for a total of $3.3 million.
Ronald Vargas, Sales Manager of the investment banking Group Improsa said to elfinancierocr.com that they plan to put together more such instruments with Credi Q and possibly with other companies selling and financing new vehicles.
GEVESA and Grupo Q have concluded the companies' merger of their vehicle sales operations and the new group's name will be Grupo Q.
Juan Federico Salaverría, GEVESA president, explained that legally they will continually to operate independently, especially with regard to suppliers. GEVESA, which distributes the Mazda, Peugeot and Ford brands will take a 30% share in the new combined business.
Vehicle stores are offering new promotions and more attractive financing plans for new car purchases.
Longer term financing with lower monthly installments, deferred down payments and free accessories with the purchase are some of the promotions offered by car companies.
"Grupo Q focused on the deferred down payment concept. This allows the buyer to pay just half the down payment when he purchases the car, and the rest five months later", reported Elsalvador.com.
With the acquisition of the rights to auto-parts and replacements, Group Q becomes the unique distributor of the Chevrolet brand in Honduras.
Ingrid Antúnez in an article published in Elheraldo.hn writes: "Honduras is the third country where the group represents the Chevrolet brand. At present, it is a dealer in Costa Rica and Nicaragua. Javier Madrid, general manager of Group Q, affirmed, “to become the distributor of Chevrolet for Honduras represents a vote of confidence that as a regional business you satisfy clients and meet their expectations of growth [even] set against the challenges of the local and global economy."