
Argentina
On 10 December 2019, Alberto Fernández took over as president with inflation and a benchmark interest rate in the range of 50%. Although further stressed by the global health pandemic which started in early 2020, Argetina has seen inflation and interest fall to just under 40% in 1Q21.
With 14 million cars, Argentina is home to the third-largest automobile fleet in Latin America, only behind Brazil and Mexico.
Thank you to contributors to the Argentina WikiFleet page: AutoCorp BDO RDA Renting
Chapter 1: Economic and business environment
Demographics | Population of approximately 46 million (2022) |
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Capital | Buenos Aires (est. population 2.89 million) |
Major cities | 1. Buenos Aires (2.89mn, or 13.5mn metropolitan area) |
Languages | Spanish (official) |
GDP | 2022 (Nominal) |
Unemployment rate | 7.1% (August 2022) Source: Trading Economics |
Main industries | food processing, motor vehicles, consumer durables, textiles, chemicals and petrochemicals, printing, metallurgy, steel |
Currency | Argentine peso |
Interest rate | 75% (January 2023) benchmark interest rate Source: Trading Economics |
Fleet Maturity Index (scaling) | Due to the impacts of the COVID-19 pandemic and correlating closedowns, overall vehicle production in Argentina droppped 18% in 2020 to 257,187 units, being 93,001 passenger cars and 164,186 commercial vehicles. (source: OICA) |
Political key info | Despite attempts of state reform and commercial openness by President Mauricio Macri, the country's economy started to slide in 2018 and continued worsening up until his reelection bid in 2019. In October (2019), he was defeated by Alberto Fernández, the new president-elect of Argentina. Mr. Fernández will be taking office on 10 December. |
Inflation | 95% (December 2022) Source: Trading Economics |
Chapter 2 : Automotive market, segments & sales
Total Car park | 2020
Source: AFAC (Argentina component manufacturers association) |
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New vehicle registrations (Cars, LCV, Trucks) | 2022 source: Focus2Move. |
Top 5 brands (total market) | 2022 sales 1. Toyota (85,357 units) +16% 2. Volkswagen (48,215) +11% 3. Fiat (55,675) -15% 4. Renault (44,669) +27% 5. Peugeot (35,658) +31% source: Focus2Move (ACARA-ADEFA) |
Model preference top 5 (total market) | 2020 1. Toyota Hilux tops the list for the third year in a row with 18,327 units sold (down 24% year-over-year) 2. Chevrolet Onix (-0.4% y-o-y) 3. Fiat Cronos: (+49%) 4. Volkswagen Gol: (+7.3%) 5. Volkswagen Amarok: (+2.3%) A spotlight goes to the VW T-Cross compact SUV which saw a 167% jump in sales in 2020, ranked at No. 10. Source: BestSellingCars ACARA-ADEFA |
Dealer network (including fleet dealer network) | More than 1,500 car dealerships are in Argentina. The country's dealership association is ACARA |
Chapter 3: Company car market
Total Fleet Park (company cars)/Fleet penetration in total fleet sales | Argentina does not have any formal data disclosing this information. |
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Evolution fleet sales (last 5 years) | In 2021, light & heavy commercial vehicles sales rose 26% to 128,664 units from 102,183 (source: OICA) |
Top 5 fleet brands (fleet market) | Some of the most popular light commercial vehicle brands in the country are Toyota, Volkswagen, Renault, Chevrolet, Ford.
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Fleet Model preference top 5 (fleet market) | Some of the best-selling light commercial vehicle models in the country are Toyota Hilux, Ford Ranger, Renault Kangoo, Volkswagen Amarok, and Peugeot Partner. |
Chapter 4: Taxation & legislation
Argentina | ||
The basis of company car taxation in Argentina is reflected in this overview. Different types of taxes are considered here: taxes related to the registration of the vehicle, income taxes and VAT aspects. Expected future developments are also briefly listed, if any. | ||
1. Car taxation | ||
1.1. Registration tax | ||
Taxable event | The taxable event includes the individual/Company’s purchase, importation, self-production, receiving as gift or award, or other forms of obtaining a taxable vehicle for personal-use. | |
Taxable person | Individual/ Company | |
Taxable due | Vehicle Purchase Tax payable = Market value * Tax rate (1,50% (National Vehicles) – 2% (Imported Vehicles)) Determination of market value for the initial registration: The one that arises from the valuation table of the National Administration. When it is not possible to determine the value, and if they were new national imported automobiles or imported ones through intermediaries: the price of the good plus expenses and taxes resulting from the operation, according to the sales invoice or an equivalent document. | |
Taxable period | In one occasion only, at the moment of acquiring the vehicle. | |
1.2. Annual circulation tax | ||
Taxable event | The registration of vehicles is taxed in the corresponding provincial territory. (Auto Registration Fee) | |
Taxable person | The individual or company who register a vehicle with the administrative departments of vehicles within the territory of Argentina. | |
Taxable basis | The valuation of motor vehicles is calculated annually according to the characteristics and the values assigned by the chamber representing the automobile insurance activity, insurance companies, specialized publications and the chamber of official dealers. | |
Taxable period | The payment of the tax is annual, divided in 6 bimonthly installments. | |
2. Income tax | ||
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3. VAT | ||
3.1. General | ||
Enterprises recognized as general taxpayers are entitled to use the input tax to credit against the output tax.
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3.2. Leasing | ||
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4. Company car | ||
4.1. Income tax - Deductible expenses and Depreciation | ||
ü Automobile maintenance: is deductible only up to ARS 7,200 per car for each fiscal year.
ü Annual depreciation allowances for trucks and automobiles: 20% per fiscal year. ü Depreciation for automobiles, including those used for leasing, is deductible only up to that part of the acquisition cost not exceeding ARS 20,000 (net of VAT). | ||
4.2. VAT – Deduction | ||
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4.3. Company car in personal tax returns – benefit in kind | ||
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4.4. Leasing Financial - Accelerated depreciation | ||
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5. Income taxes – drivers’ personal taxation | ||
5.1. Private car in the personal tax return | ||
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6. Excise Tax | ||
Taxable event | Includes the transfer and importation of automobiles and motorcycles. | |
Taxable person | Producers, importers and merchants. | |
Taxable rate | Rates vary depending on the sales value of each type of good: Automobiles and Diesel Engines: 0% (in effect until 12/31/2018) Automobiles: - Up to ARS 900,000: Exempt - Higher than ARS 900,000: 20% Motorcycles: - Up to ARS 140,000: Exempt - Higher than ARS 140,000: 20% | |
Taxable due | Excise duties are normally calculated on the sales price as including the excise tax itself and any other tax levied on the chargeable product except VAT. | |
Taxable period | At the time of acquisition | |
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Source: BDO (2018)
Biodiesel
As of January 2018, biodiesel exports have an 8% tax. Besides keeping more of the fuel at home, this will bring the market closer to the 27% export tax already being lobbied on soy oil.
The Argentine government has approved a new emissions policy through resolution 797-E. As of January 15, 2018, automobile manufacturers and vehicle importers in the country will need to declare carbon dioxide emissions and fuel consumption amounts.
In the meantime, while the European Union has lowered import duties from Argentine biodiesel exporters, the United States has increased its import duties.
Moreover, its worth pointing out that Argentina gives progressively increasing tax breaks on cars US$25,000 and more.
Chapter 5: Car policies
There isn't a standard car policy in Argentina as determining who gets a vehicle is directly related to the company's core business. Nevertheless, salesforce divisions are usually the ones that have more company vehicles and these types of cars are known as “job car” o “tool vehicle”. Managers and Directors also have vehicles. However, these vehicles are not necessarily related to the daily activity of the company and they are known as “benefit cars”.
In terms of using vehicles for private and business use, many companies find it very difficult to measure and control their fleets parametres so cars frequenly end up being used for both purposes. Besides a lack of well defined policies, there is a lack of fleet management and telematics support in the country.
When it comes to traffic violations, they are not easy to deal with in Argentina as it is difficult to access ticket information on a single unified platform. It is actually quite simple in the main cities, but accessing this information is much more difficult in small cities in far-away provinces.
In terms of paying fines, it is usually the employees' responsibility. As legislation does not allow companies to make deductions from salaries, HR departments depend on the “goodwill” of the employee. In many cases, employees just end up paying off their tickets at the end of their policy when they have an option to buy the car (a common benefit given by companies).
As for vehicle repairs, it depends on each and every policy. However, more companies nowadays rely on the expertise of fleet management companies to take care of this. However, there are still quite a few companies that have their own direct agreements with garages and repair shops. Accidents, on the other hand, are handled by insurance companies.
Argentina's vehicle leasing market has experienced exponential growth over the last few years and there is still a high demand for renting & fleet management solutions.
Nevertheless, there still a lot of ground to cover, especially for companies that still manage large vehicle fleets alone and without any type of outsourcing solution.
Source: RDA Renting