Auto manufacturing drops 22%Thursday, May 8, 2014
Motorcycle sales decline 45% in April, compared to last year
Motorcycle sales dropped 45 percent in April compared to the same month last year, according to the Argentine Association of Motorcycles (MOTTOS), parallel to a 40-percent plunge in car sales and 21.6 percent in production, according to the Association of Automotive Factories (ADEFA).
The figures illustrate the woes currently faced by the auto sector, with as many as 12,000 workers having been temporarily suspended in the last two weeks, including vehicle manufacturers and auto-part producers, according to the SMATA auto industry workers’ union. A number of these suspensions have already been lifted, including 600 by Renault and 700 by Volkswagen.
In April, 34,532 motorcycles were sold, well below the 63,480 sold in the same month last year. In the first four months of the year, sales dropped 25 percent from 254,892 to 189,587.
“It has been a similar month compared to March, with very similar sales figures and with a continuous drop that worries us. If no measures are taken, we will keep following the same path,” Diego Dinitz, head of MOTTOS, said yesterday. “We have intensified our work at meetings with government officials and presented proposals to reactivate activity.”
Looking for alternatives to resolve the situation, Dinitz proposed that every motorcycle maker offer two o rthree vehicle models with “special sale conditions,” such as a payment plans supported by the federal government “with lower interest rates than the ones now available.”
“We are really hopeful that this proposal by MOTTOS can be implemented soon. It would allow us to start changing this steep drop in the level of activity in the motorcycle sector,” he said.
According to ADEFA, 59,165 cars were manufactured in April, and 51,346 were sold to local retailers. Exports reached 32,479 vehicles, a 20.5 percent drop compared to the same month last year but a 12.8 percent increase compared to March. In the first four months of the year, 206,581 units were manufactured and 202,652 units were sold, a 29.8 percent drop on the same period last year.
“Lower demand in the domestic market, the particular scenario faced by the main export market (Brazil) and the union conflicts with some suppliers have had their impact on the activity, which is reflected in production and exports levels,” ADEFA explained in its monthly report. “The government applied austerity measures such as the devaluation, which affected domestic consumption, and authorized a tax hike on high-end vehicles, which ended up affecting 70 percent of vehicles sold.”
The federal government is negotiating with Brazil for the extension of a bilateral auto pact to guarantee trade volumes. But it also hopes to decrease Brazil’s allowance for duty-free exports into Argentina to protect a shrinking trade surplus, which could be bad news for producers needing specific parts.
Herald with Reuters, DyN