The premium vehicle market in Peru faces a contraction of 3.4% in 2023.

The premium vehicle market in Peru has experienced a contraction of 3.4% up to July 2023, compared to the same period last year, according to data provided by the Automotive Association of Peru (AAP). This decline is largely attributed to an increase in demand and supply that was recorded last year, following a challenging 2022 marked by stock and availability issues. Antonio Rivera, general manager of BMW Group Peru, emphasizes that these factors have directly influenced market behavior. Despite this contraction, the premium segment has shown greater resilience compared to the light vehicle market, which has seen a more drastic decrease of 13.5%. This trend suggests that, although the premium market faces challenges, it has remained relatively stronger, as Mike Pariamachi, business manager for cars at Divemotor, the representative of Mercedes-Benz, indicates. Industry analysts, such as Willard Manrique, a specialist in Commercial Management at PAD, the Business School of the University of Piura, point out that the recovery of consumption and consumer confidence in Peru is not at its best, which affects growth expectations for the premium segment in the short term. Despite this, Manrique estimates that the market could reach pre-pandemic levels by 2025 or 2026, as long as supply chains stabilize and global confidence improves. Projections for the end of 2023 are not entirely optimistic. Alejandro Ruiz de Somocurcio, manager of premium brands at Gildemeister, and his counterparts in other companies, foresee that the market will end with a figure similar to this year, although there are also predictions of a possible contraction of between 1% and 3%. This scenario suggests that the premium segment, while more resilient, still faces significant obstacles to a rapid recovery. Mercedes-Benz, on the other hand, has managed to maintain a competitive position, with growth of 16.7% up to July. This makes it the only brand in the top 3 that has not seen a decline in its sales. Pariamachi attributes this growth to the expansion of its portfolio and consistent demand for its vehicles, which includes a strong customer service strategy. The brand is focusing on its Top-L line, which includes high-end vehicles and sub-brands such as Maybach, as well as AMG sports models, which have an entry price ranging from $100,000 to $300,000. According to Pariamachi, the most exclusive products, such as the G-Class, can reach prices of up to $500,000, reflecting Mercedes-Benz's intention to cater to a market seeking luxury and exclusivity. In the realm of electric brands, Volvo stands out with an outstanding growth of 49.3% and expects to sell around 600 units this year. Ruiz indicates that the brand is in the midst of a transition to a 100% electric portfolio by 2050 and has already begun to offer exclusively plug-in hybrid and electric vehicles in Peru. It is projected that electrified vehicles will represent 80% of their sales by the end of 2023. BMW, although a leader in the premium segment, has recorded a decline of 10.9% in its sales up to July. Rivera remains optimistic, trusting that the brand will maintain its first place by the end of the year thanks to a diversified portfolio that includes gasoline, hybrid, and electric models. However, he also acknowledges that the Mini brand has experienced a significant drop in sales, which is attributed to a record high reached the previous year. The situation of the premium vehicle market in Peru reflects global trends, where economic recovery and stability in supply chains will become determining factors for its future growth. With companies adjusting their strategies and an increasing focus on electrification, the sector presents an interesting outlook, albeit filled with challenges, for the coming years.