Wikifleet update: Automobile industry weathers storm in Argentina
The automobile industry in Argentina is showing resilience despite the ongoing health pandemic and the economic stress the country had been facing even beforehand.
Last year, new vehicle registrations totaled 342,474 units, down 25% year-over-year. Although quite a blow, the Argentinean market (national fleet of some 14.3 million) was only the second hardest hit considering the top five largest automobile markets in Latin America. Only Brazil fared better, seeing a drop of 22%.
While Argentina exports were down 39% to 137,891 units in 2020, sales at the country’s 1,500+ dealerships slipped by 16% to 312,789 units. Meanwhile, production in the country was down 18% to 257,187 units, according to the latest updates on the country’s Wikifleet page.
This is still better than 2019 (especially for the local market) of which exports and local dealership sales slid 17% and 45% respectively. Production that year fell 33%.
Among the best-selling brands in 2020 were Volkswagen, Toyota, Renault, Fiat, and Chevrolet with the top model being Toyota Hilux pickup (down 24% to 18,327 units). Other best-sellers included Chevrolet Onix, Fiat Cronos, Volkswagen Gol, and Volkswagen Amarok.
The rising star last year was the Volkswagen T-Cross (crossover SUV) with sales jumping 167% year-over-year to 9,221 units.
2021 Volkswagen T-Cross (copywrite: Volkswagen)
Argentina’s high interest rates brought on by heavy inflation in recent years has been making leasing and financing options more challenging, according to Rodrigo Fernandez who is Region Procurement Head (Indirect Materials) for multinational construction firm Hilti.
“Leasing is quite expensive due to the high cost of financing so, for us, direct purchases are occurring there,” Mr. Fernandez told Global Fleet.
Rodrigo Fernandez (source: Handout)
Despite this, both inflation and the benchmark interest rate have been going down in the country so leasing could be a more viable option in the near future if the trend continues. While inflation and interest rates were 41% and 38% respectively in 1Q21, they were 53% and 50% one year prior and even higher than that in 2019.
Among the companies offering rental and leasing options in Argentina are local firms RDA Renting (part of the Element-Arval alliance) and Auto Corp (part of the ALD Automotive-Wheels alliance). They have national fleets of approximately 11,900 and 2,500 respectively.
According to a 2020 Global Fleet Survey, approximately 63% of multinational companies in the country are offering company cars to employees.
For more information on Argentina and other countries, visit Wikifleet, a collaborative effort by the Global Fleet team covering five regions and nearly 50 countries throughout the world.