"It is so sad, and terrifying," added Llanos, who was driving the car and was not injured.
Cabral was struck by bullets several times and died in the car, police said.
Another vehicle where his bodyguard was traveling was riddled with 25 gunshots but nobody in it was wounded, police said.
Interior Minister Carlos Menocal told a press conference that it appeared that gunmen may have mistakenly killed the singer after taking him for Nicaraguan businessman Henry Farina, who had hired Cabral for the shows.
"So far everything seems to indicate the hit was supposed to have been against Farina and not the singer," said Menocal, adding that police found a car used in the killing with bulletproof vests inside.
Guatemalan President Alvaro Colom decreed three days of official mourning "for someone who was committed to the country."
Colom said Guatemala had to be painstaking in its investigation. "I know that this is not easy, but I hope that we will join together in finding the truth and capturing these criminals," the president said.
His spokesman had said Colom was "dismayed by this cowardly act."
"It is sad that a man who sang about love, peace and happiness has lost his life to some bastards," presidential spokesman Rolando Robles said earlier.
The motive for the killing was not immediately clear. The Guatemalan government issued a statement, however, saying that neither a robbery nor a planned attack on Cabral had been ruled out.
Cabral, who was born in La Plata, in Buenos Aires province, became a star as part of the 1970s protest music movement. A global nomad who said he was deeply inspired by the US poet Walt Whitman, his music was largely about peace, love and everyday pleasures and pain.
Cabral's songs, which include the 1970s hit "I'm not from here, nor am I from there," are frequently performed by other well-known Spanish-language singers like Julio Iglesias, Juan Luis Guerra and Joan Manuel Serrat.
Some 5,000 people heard Cabral sing on Tuesday. He had a second concert on Thursday. Less than two hours after his death, hundreds of Guatemalans gathered near the crime scene waving signs demanding peace and public safety.
Guatemala has one of the highest murder rates in Latin America -- 18 per day on average in a country with a population of nearly 14 million. Street gangs and powerful Mexican drug cartels are active in the country.
"Sadly we are outraged by yet another violent crime that is causing terror, fear, and I cannot help thinking that his ideals cost him his life," said Nobel peace laureate Rigoberta Menchu, at the scene of the crime. "He loved Guatemala so much."
The singer had been in the arts for a half century, and said he had visited 150 nations.
"I am deeply saddened by this shameful murder," said Colombian President Juan Manuel Santos.
Ecuador's President Rafael Correa called the killing "such bad news."
"Oh such pain," Venezuela's President Hugo Chavez tweeted. "Long live Facundo Cabral! We are crying with Argentina" and Latin America, Chavez said.
Argentina's top diplomat Hector Timerman echoed the "great sadness" on Twitter, and said "farewell, friend."