MercoPress. South Atlantic News Agency

Argentina heading for car sales record year

Argentina's booming economy is reflecting in the automobile industry with sales of new models and second hand cars forecasted to reach 1.6 million, the highest ever.

Furthermore last May was another benchmark with new model sales reaching 38.800 compared to the previous record of 37.700 in May 1998.

The Argentine automobile industry best year ever was 1994 with sales of over half a million first hand vehicles, followed by 1998 with 473.554, and the worst ever since car manufacturing began in 1969, was 2002 with 96.951.

"This has been a relevant month (May) since for the first time in eight years we've sold more new models than in 1998. This means the recovery is over and we can begin to talk of expansion. By the end of 2006, sales should reach 460.000 units" said Horacio De Lorenzi, president of Argentina's Automobile Dealers Association, ACARA.

This year will also be exceptional for second hand vehicles with sales forecasted to reach 1.150.000, up 15% from 2005, the best ever. As to the ratio between new models and second hand cars, during the crisis year of 2002 it was one new to eight second hand, but in 2005 was 2.6 used cars to a new model and this year should end 2.2 to one.

The highest selling models in the first four months of 2006 were: Volkswagen Gol, 16.925 units; Chevrolet Corsa, 12.884; Fiat Palio/Siena, 9.523; Peugeot 206, 9.183; Renault Clio, 8.628; Ford Fiesta, 7.149; Ford EcoSport, 6.488; Chevrolet S10, 5.174; Ford Ranger, 4.981 and Renault Kangoo 4.596). Argentina has an estimated 11 million units.

Another difference with the "roaring" nineties is that most car sales now are virtually cash.

"In the premium sector of imported cars (Lexus, Mercedes, BMW, Volvo, etc.) sales are at record levels, the best in twenty years", admits José Janeiro Figueroa member of the Chamber of Official Car Importers and Distributors, CIDOA.

But contrary to then when 30% of sales were financed, the percentage now is below 3%. "Buyers hand in the old model and pay cash for the difference or simply make an only down payment, in spite of the availability of credit".

With less expensive models the same is valid: "before 70% of sales were financed, now the percentage is down to 25%; people have cash", stresses De Lorenzi adding that "with or without credit we're heading for a record sales year, which was but a dream only a couple of years ago".