Peru’s Car Market: Used Vehicles Dominate, EVs on the Rise

Introduction

The automotive industry in Peru has been steadily growing, driven by increasing consumer demand, economic stability, and government initiatives to improve infrastructure. According to a study published by The Report Cube, the Peru Automotive Market is anticipated to register a CAGR of around 3.81% during the forecast period (2026-2032). This growth reflects the rising adoption of vehicles, expansion of the used car market, and increasing investments in electric and hybrid vehicles.

For general consumers looking to understand the Peruvian automotive sector, this article provides an in-depth analysis of market size, key trends, challenges, and future opportunities.

Market Overview and Industry Size

Peru’s automotive market is one of the most dynamic in Latin America, supported by a growing middle class and improving economic conditions. The market includes:

• New Vehicle Sales (Passenger cars, SUVs, commercial vehicles)
• Used Vehicle Imports (A significant portion of the market)
• Electric and Hybrid Vehicles (Emerging segment with government incentives)

Key Market Drivers

1. Economic Growth & Urbanization
• Peru’s stable GDP growth has increased purchasing power, leading to higher vehicle ownership.
• Urbanization has boosted demand for personal and commercial vehicles.
2. Government Policies & Infrastructure Development
• The Peruvian government is investing in road infrastructure, boosting automotive sales.
• Tax incentives for eco-friendly vehicles (hybrids and electric cars) are encouraging adoption.
3. Rising Demand for Used Cars
• Due to affordability, used vehicles (imported mainly from Japan, the US, and Europe) dominate the market.
• The used car segment accounts for nearly 70% of total vehicle sales.
4. Increasing Preference for SUVs & Compact Cars
• SUVs are gaining popularity due to better road adaptability.
• Compact and fuel-efficient cars remain preferred for city commuting.

Market Segmentation

1. By Vehicle Type

• Passenger Vehicles (Sedans, Hatchbacks, SUVs) – Largest segment.
• Commercial Vehicles (Trucks, Pickups, Vans) – Growing due to e-commerce and logistics expansion.
• Electric & Hybrid Vehicles – Still niche but expanding with government support.

2. By Fuel Type

• Gasoline – Dominates due to lower fuel prices.
• Diesel – Preferred for commercial vehicles.
• Electric/Hybrid – Fastest-growing segment.

3. By Distribution Channel

• New Car Dealerships (Brand-authorized showrooms).
• Used Car Dealers & Online Platforms (Major sales channel).

Challenges in the Peru Automotive Market

Despite growth, the industry faces hurdles:

1. High Import Taxes on New Vehicles
• New cars are expensive due to tariffs, pushing buyers toward used imports.
2. Lack of Local Manufacturing
• Peru relies heavily on imports, limiting domestic production.
3. Underdeveloped Charging Infrastructure for EVs
• Electric vehicle adoption is slow due to insufficient charging stations.
4. Economic Uncertainty
• Inflation and global supply chain disruptions impact vehicle prices.

Future Trends & Opportunities

1. Growth of Electric Vehicles (EVs)

• The government aims to increase EV adoption through tax exemptions.
• Brands like BYD, Hyundai, and Nissan are introducing affordable EV models.

2. Expansion of Ride-Sharing & Car Rental Services

• Companies like Uber and Beat are increasing demand for flexible mobility solutions.

3. Digital Transformation in Car Sales

• Online platforms for buying/selling used cars (e.g., Kavak, OLX) are gaining traction.

4. Increased Investment in Automotive Financing

• Banks and financial institutions are offering attractive loan schemes for car buyers.

Conclusion

The Peru Automotive Market is on a steady growth path, with a projected CAGR of 3.81% (2026-2032). While challenges like high import taxes and limited EV infrastructure persist, opportunities in used car sales, digital platforms, and electric mobility are shaping the future.

For consumers, this means more options, better financing deals, and a gradual shift toward sustainable vehicles. As Peru’s economy continues to grow, the automotive sector will play a crucial role in shaping the country’s transportation landscape.