Part of the reason for this is because foreign pricing are competitive. Domestic sales are also improving, but import bans remain in place, while used ones remain stable. The option of financing a portion of the new car as an investment.
The current Report of the Argentine Automotive Market’s Online Information System (Siomaa) noted an increase in zero-kilometer car sales, but more importantly, in industrial production. With a decline in imports due to exchange limitations, the sector assessed that there is an unfulfilled demand because entry to this market is nearly difficult for those who can afford it.
According to the Siomaa study, February 2023 was the best month for output in the last nine years. “To find a better February, we must go back to 2014, when about 53,000 units left national factories in a market that was 29% larger than the current one (local national units) and 11% higher in exports,” he noted.
The 46,286 automobiles that were produced during February is about 23% higher than in the same month of the previous year; which means a growth of more than 30% if the first 60 days of the year are taken. The increase in supply is attributable to an increase in demand in the overseas market, which increased 20.4%, partly owing to the exchange rate disparity, which benefits the value of Argentine automobiles abroad.
Meanwhile, there was a 14.6% increase in domestic market sales or patenting in the first two months. Carlos Martn, a representative of the Association of Official Automotive Dealers in the Argentine Republic (Acara) in Mendoza, noted that this is because autos have become a valued shelter, while traditional ones, such as real estate, have become more distant from the people.
Those who can afford to change cars, on the other hand, can get reasonably cheap financing in comparison to inflation close to 100%. In addition to standard Savings Plans, companies and banks offer to finance up to 30% of the vehicle’s worth at rates ranging from 15% to 45% per year.
Although the charge for a Savings Plan varies depending on the car and the amount agreed to finance, it should be noted that the fee for a Savings Plan is roughly $60,000 each month. Meanwhile, to finance the balance that remains after the initial payment – potentially a value of close to three million pesos – in the price of a vehicle, a monthly withdrawal of close to $150,000 is required.
It is an opportunity for high-income sectors in both circumstances. Another appealing feature is the option of taking up the car first and then paying for it later. It is that, while the price increases with the increase in the vehicle, it is a modest modification in comparison to the final valuation of the purchased commodity. The present issue is that some terminals do not have cars, which is why waiting lists have been established.
Decrease in imports
According to Siomaa, wholesale sales of national units nearly double the total, and will continue to be a significant and rising source for the sector. compared to the real world. This is owing to import limitations, which have made this enterprise nearly impossible.
According to Martn, dealerships only sell these types of devices when they have them in their hands, since otherwise they are making false promises. “We have no idea when it will arrive, if the rules will change in the middle, or what the final price will be,” the businessman explained.
In this regard, the patenting report said unequivocally that imports continue to be subject to limits based on foreign currency availability and, as a result, stay at a managed stability (-3.4% in the two-month period).
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