November 24, 2014
Used car sales down 9.07% in semester
As sector’s overall crisis continues, transactions drop 13.9% on June last year
Car sales reported by the CCA auto commerce chamber dropped 13.9 percent in June on the same month last year, with the semester closing 9.07 percent down.
Used car sales totalled 117,868 last month, 7.83 percent less than the amount of vehicles that swapped hands in May.
Although affected by the auto sector’s overall crisis later than new cars, the drop in used vehicle sales has ultimately proven a significant headache, as second-hand cars had been widely regarded as the last bastion of consumption.
The hike in the luxury goods tax only directly affected the top bracket of cars in terms of price, but auto makers said they had to readjust rates proportionally on lower-segment vehicles.
Production was the second part of the value chain to be hit, with manufacturing output suffering another month of depletion in June, falling 19.8 percent on the same month of 2013, according to the ADEFA auto factories’ chamber. The sector thus brought the curtain down on a crisis-riddled semester with a 21.8 percent contraction.
With regard to used sales, CCA head Alberto Príncipe said the nine-percent drop for the semester was “more reasonable.”
“Let’s not forget that this is a market in full-on recovery mode,” he argued, also calling for “demand to be more sustained so as to establish definitive prices for vehicles of different brands and models, and also to be able to have a more balanced market.”
Like his counterparts at the ADEFA factories’ and ACARA dealerships’ chambers, Príncipe was optimistic about the semester ahead, however.
“We’re on the right track. Let’s hope that the second semester sees the continuity that’s needed,” the chamber head said.
Late last month, the government seemingly took the first step in fostering the sector’s revival by introducing the Procreauto car loan scheme for new vehicle purchases. Cabinet Chief Jorge Capitanich said the measure would “stimulate production levels to reach the goal of 700,000 units” for the year.
In the first six months of 2014, sales from plants to dealerships reached 306,461 units, 33.8 percent lower than in the same period in 2013. In a similar vein, automobile exports totalled 34,418 units in June, an inter-annual decrease of 19.2 percent, but an increase of 14.2 percent in comparison to the May result.
Production was 0.1 percent lower than in May, with a week of the government-sponsored Procreauto car loan scheme failing to nudge up both sales and production.
The news on the month’s used sales comes a week after the government published a resolution in the Official Gazette to make the paperwork required to register a new car 23 percent more expensive.
In the second week of June, the government sealed a deal with Brazil seeking to address declining trade with the neighbouring giant, Argentina’s main trade partner.
A 12-month extension to their bilateral car trade pact was thus signed, granting the government more favourable terms, mainly in the agreement of exchange rates. Cars make up half of the US$36 billion trade between the neighbours.
Province by province
Only two provinces saw recovery in the sale of used units during the semester: Santa Cruz, by 3.89 percent, and San Luis, by 2.02 percent.
The most significant decreases were seen in Mendoza (-16.19 percent); Río Negro (-13,62 percent); Chaco (-13,51 percent); Misiones (-12,92 percent); Jujuy (-12,88 percent); La Pampa (-12,59 percent) and San Juan (-10,20 percent).
Herald with Reuters