LIKE a growing number of Colombians these days, Antonio Benevides of Bogota just bought his first car.

Rising incomes and affordable terms are causing a surge in car sales in the country and elsewhere in Latin America, where economies are flush with the windfall from the global commodities boom.

But low prices are another factor in the sales surge, and that puts Benevides, a 26-year-old amusement park worker, in the middle of a different, still emerging consumer trend. He bought an inexpensive Chinese import, a brand new Chery QQ compact, for about US$9,000 - or US$3,000 cheaper than the comparable car from French car maker Renault, whose tires he also kicked.

"That difference in price is what put a new car within my reach for the first time," Benevides said as he drove the car off the dealership lot near Bogota's El Dorado International Airport. "I've heard they hold together well, that they are cheap to operate and, as you can see, they are not bad looking."

Chinese auto manufacturers, which sold about 18 million cars on their home turf in 2011, are increasingly looking to other emerging markets as stepping-stones in their long-term quest for global trade prominence and perhaps winning over US and European motorists in decades to come.

According to AT Kearney consultants, Chinese car makers exported half a million cars worldwide in 2011, and will accelerate to as many as two million by 2015 and three million by 2020.

The fastest-growing destination for those exports is Latin America, where overall car unit sales in countries like Brazil, Colombia, Peru and Argentina have grown sharply in recent years. While Chinese models are scarce in North America, some 16 brands including Chery, Foton, Great Wall, Geely and Yangtze are now sold in Colombia, and twice that number in Peru.

"I bought it for economic reasons, as simple as that," says Jaime Rodriquez, a 42-year-old Bogota-based accountant who purchased a US$13,000 made-in-China Geely - his second car - in November.

His primary motive? Having a second license plate to get around Bogota's traffic restrictions, which stipulate the number of days a week that a car can be driven on its roads. "A Mazda with similar features would have cost me US$2,000 more," Rodriguez says.

Cost savings

Cost savings can be even more dramatic in other countries, such as Brazil where some Chinese models sell for two-thirds the price of a comparable US$20,000 Volkswagen Golf, according to Guido Vildozo, an auto industry expert with IHS Automotive in Massachusetts.

What makes Chinese cars so much cheaper? Partly, it's relatively low labor costs. Most Chinese auto workers earn between US$300 and US$400 a month, compared with, say, Mexican workers, whose monthly pay is between US$2,000 and US$3,000. US assembly line workers make an average US$5,000 to US$7,000 a month, according to Vildozo.

Jian Sun, a partner with AT Kearney auto consultants in Shanghai, adds that another important cost advantage that the Chinese enjoy is the reverse engineering that they carry out on US, European and Japanese cars, which saves them much of the cost of designing new models themselves from scratch.

Whatever the reasons, Colombian consumers are taking to Chinese cars. Oliverio Garcia, president of Andemos, the national car dealer trade association in Bogota, notes that Chinese car makers now have a 5 percent market share in the price-conscious Colombian market, up from zero five years ago, and are gaining.

In Peru, Chinese imports captured 15 percent of the new unit sales in 2011, up from 12 percent the previous year, and from virtually zero six years ago, says an executive at Lima-based dealership Plaza Motors.

Observers note several factors in China's rapid advance.

Middle class

First, the tide of economic growth is rising faster in Latin America than most other markets, pushing up consumption in everything from white goods to tourism to housing.

And it's not a fluke.

Prosperity in the region has caused an expansion in its middle class to 30 percent of the population from 20 percent a decade ago, adds Augusto de la Torre, the World Bank's chief Latin America economist.

Individual households are reaping the benefits. Colombia's GNP, or per-capita yearly economic output, has nearly doubled from US$3,400 to US$6,700 in just five years, while inflation has remained a manageable 5 percent or less most years, says Camilo Perez, an economist with Banco de Bogota.

That means households have more disposable income.

The upward mobility combined with economic good times are having a psychological impact: Consumers are more confident about their futures, and thus more willing to invest in cars - the second-largest purchase most will make, after their homes.

The availability of credit is another factor. Although some countries, including Brazil and Chile, have tightened credit in recent months to try to control inflation, car loans over the past decade generally have become much more affordable in Latin America.

Seven-year car loans at single-digit interest rates are common, making payments more acceptable than a decade ago when loans typically were paid off in two or three years. The improved stability and strength of the region's financial services industry have made credit more available.

Moreover, most countries, with the notable exceptions of Venezuela and Argentina, have tamed the inflation beast that once put a damper on Latin credit markets and made lenders reluctant to extend terms.

The convergence of these factors has contributed to rapid growth of the Latin American car market - and to expectations that the boom will continue.

Colombian car sales in 2010, for example, jumped 25 percent last year from the previous year to about 300,000 new light vehicles sold and could grow by another 25 percent in 2011. AT Kearney's Dallas-based Americas partner Brian Irwin projects a highly robust average 11 percent annual growth rate in Colombian unit sales through 2023.

Because annual auto sales growth in mature markets, such as the US and Europe, are trending at no more than 2 percent, it's easy to see why Latin America is so attractive to Chinese manufacturers.

Winnowing out

According to analysts, the high influx of Chinese car brands into Latin America is part of a winnowing out among manufacturers.

Many Chinese manufacturers view overseas expansion as a survival tactic in their notoriously cutthroat domestic market, which requires scale to support growth.

Unlike the US and Europe where 100 years of consolidation has reduced major manufacturers to about a dozen, scores of Chinese automotive companies, many of them owned by regional or city governments, are still undergoing a process of natural selection.

Adapted from an article from China Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. To read the original version titled "Hitting the Accelerator: Chinese Automakers Race to Latin America," please visit: http://bit.ly/wpNr9B.