The proposal did not cease to surprise him. The seller offered the person interested in a 0km car a certain price if the delivery was within 6 months of signing the operation and another amount, with a 40% increase, if the unit picked it up “at the time” (15 processing days). The buyer, naive, asked him the million dollar question: “How can it be that there is such a difference?”
The answer did nothing more than expose the moment that the automotive market is going through: “We do not have available units and, those that exist, are charged at that value.” “Scarcity” is the magic word that graphs the state of affairs. Given the lack of dollars in the economy, the importation of vehicles is one of the adjustment variables. Thus, the industry reduces its sales and production levels.
Far away was the record of one million cars sold in one year. Today, the projected number is 400,000 by 2022. Less volume, same margin. With this premise, which is shared by multinationals from other areas, the sector adapts to the Argentine context. “Hopefully this number is the floor and not the ceiling,” says Ricardo Salomé, president of the Association of Automotive Dealers of the Argentine Republic (ACARA). Already in 2021, the industry aspired to reach 450,000 units, but it closed at 380,000. “We had a significant shortage of vehicles,” admits Salomé. “We are forecasting a market of 410 thousand and from Renault we project sales of 45 thousand units, which implies a 32% growth in sales, with a focus on the growth of our nationally manufactured vehicles”, explains Pablo Sibilla, president and Director General of Renault Argentina.
what’s coming Thomas Owsianski, president and CEO of Volkswagen Group Argentina, believes that the “positive trends we saw in 2021 will continue in 2022.” “The development of the month of January makes us think that we will continue in this line with an important role of the group’s brands”, they forecast from the Stellantis group. At Toyota, Diego Prado, the company’s Director of Corporate Affairs, is another of those who believes that “the industry has great potential to continue growing.”
The reduction in size is also explained by the constant rise in prices. “The increase reached an average of 4.6% per month,” confesses Prado, regarding what happened in 2021. That is, companies do not absorb the cost of inflation, but transfer it to the values to the public. “In general, they accompany the rise in prices, except in some models of the medium and high segment in which the scarcity of models caused the increases to have been greater.”, expands Salome.
In Volkswagen they detail that in 2021, “cars increased a few points less than inflation” and that by 2022 “we will do everything possible to maintain this trend,” anticipates Owsianski. “From the company we make every effort possible to be able to accompany our clients at this time. At Volkswagen Group Argentina we are constantly looking for financing alternatives or discounts for our customers. We offer financing plans for several models, in close collaboration with VW Financial Services”, says the executive. For their part, at Renault they explain that “the values take into account both the evolution of the exchange rate and the general prices of the economy, but it is finally the market that ratifies them based on other factors such as supply and demand and strategies of each brand”, explains Sibilla.
Demand. When choosing, the market has already given its verdict: the public opts for the SUV segment over the traditional “four-door” cars. “The preference for SUV silhouettes is part of a global trend in constant growth and that is also reflected in our market. In the case of Argentina, another segment that is highly demanded is that of pick-ups, not only because of the own idiosyncrasies of the clients, but also because these products are not impacted by any of the scales of the so-called internal tax.This means that there is a lot of demand in volume and, also, that in recent years new market niches have been developed with products like the Fiat Toro”, they indicate from the Stellantis group. Prado agrees that “the pick-up segment will be the most demanded” and considers that the “highest growing segment will be SUVs, where we lead with SW4 and with the new Corolla Cross, presented in 2021,” says the executive.
In turn, Sibilla highlights a fact that is no less important in this economic context: “The segments that are going to grow the most this year” are those that have the greatest penetration of national products. “The examples are the 1Tn Picuks (95% national), B Sedan (Logan), B Hatch (Sandero) and small vans (Kangoo)”, explains the executive.
For this reason, automakers are closely following the issue of restrictions. In this sense, Owsianski considers that “it will be essential to define clear policies and rules that allow greater predictability. Focus on opening new export markets, growing in scale and gaining competitiveness in the industry and throughout the value chain”. And he expands: “It is key that we work together with the Government and the union to increase production and exports, specializing and increasing localization to win markets in a global and competitive world.”
For Sibilla, “the biggest challenges are: the global crisis of electronic components and logistical problems, as we mentioned before. Until now we have been able to protect the local production quite well from those turbulences and that is our main challenge on a day-to-day basis for 2022.”
Finally, from Stellantis they assure that “we are not registering problems with the provision of supplies for production, in terms of imports. Yes, there is a degree of uncertainty related to the semiconductor crisis that affects the world. In any case, we seal global alliances with semiconductor producing companies to be able to advance in an orderly supply according to the group’s demand”. Inside the group they clarify that, in terms of importing units, “we have fluid communication with the authorities that allows us to organize ourselves in our schedules and resolve any difficulties by respecting the guidelines established in terms of foreign trade and with an ambitious export plan”, they add.
Questions of an industry that maneuvers in scarcity.
Marcelo Alfano
by Marcelo Alfano
