Although automobile sales in Argentina
was quite positive in the first few months of 2018, the market turned around completely in the second semester of the year and the situation does not look to be getting much better soon.
In 2018, light vehicle sales fell 10.9%
year-over-year to 802,992 units and, according to the most recent figures obtained from local automobile dealers, the number of vehicles sold in the first three weeks of January was down nearly 50% compared to the same period last year, Argentinean news service Autoblog reported.
In the wake of the Argentinean peso losing approximately half its value against the US dollar, the federal government tried to resolve matters last year by raising the benchmark interest rate to 60% (highest in the world). However, this spiked inflation, reaching 47% by the end of 2018.
As for the first quarter of 2019, many automakers remain pessamistic and see weak sales owing to a lack of demand. For the rest of the year, the opinion is split, however. While some feel that consumer demand will start to return, others still have doubts and this is partially influenced by uncertainties brought on by presidential elections which will take place on October 27.
GM gears up
Among the OEMs preparing itself for the upcoming market changes is GM. During a meeting with shareholders prior to the start of the Detroit Auto Show (January 14-27), General Motors
Global CEO Mary Barra stated that the company "will not invest in losing money", according to local paper Detroit News.
GM CEO Mary Barra talks with media ahead of stockholders meeting in Detroit (source: GM)
Barra, which even mentioned the possibility of GM withdrawing from the region, said that the company is working with "key stakeholders" on ways to improve matters. GM Mercosur President Carlos Zarlenga has also stated that the situation is critical and will require important sacrifices from all, the paper said.
GM is actually the leader in sales in South America with its subcompact Chevrolet Onyx. The company, however, has stated that this was achieved through price wars and discounts.
Argentina, January sales
During the first three weeks of 2019, the best selling brands in Argentina were Toyota, Volkswagen, Ford, Chevrolet, and Renault, respectively. The best selling models were the Toyota Hilux pickup, Volkswagen Suran 4-door hatch, subcompact Toyota Etios, Fiat Cronos sedan, and the subcompact Ford Ka.
For a larger view of Argentina, including information regarding taxation, legislation, funding, car policies, upcoming trends and others, visit Global Fleet's Argentina Wikifleet