MercoPress. South Atlantic News Agency

Record car sale in Argentina in 2013, but 2014 is full of uncertainties because of new taxes

Acara president Abel Bomrad has conflicting feelings about 2014.

The registry of new cars in Argentina soared 13.5% last year establishing a record of 955.203 vehicles, compared to 2012, and also above the 860.000 units of 2011, which was the standing record, according to the Argentine association of automobile dealers, ACARA.

 In December last year the number of registrations was 49.362 units, up 31% over the same month in 2012 which had reached 37.551.

“As we have been saying since the beginning of the year we completed a record 2013, which should be motive of deep satisfaction, but the truth is that we have conflicting feelings”, said Abel Bomrad, Acara president.

“We are cautious and concerned as to how the market is going to react to the latest tax measures and the first few months of 2014 should give us an idea as to where we are heading”, added Bomrad.

Of the almost a million vehicles sold last year, an estimated 10% were top brand imported cars priced between 320.000 and 1.8 million Pesos (50.000 and 300.000 dollars at the official rate but 32.000 and 180.000 dollars at the parallel market price).

Among those brands are Toyota with 53.500 units (up 19% from 2012) and Mercedes Benz with 19.200 units (up 30%); they were followed by Honda, 12.331; Audi, 7.469; Nissan, 5.689; Hyundai, over 5.000.

However the top-top brands included Porsche with 246 units; Land Rovers and Alfa Romeo, 448 and 702, up 159% and 150% respectively and BMW with 4.000, up 81%.

Other imported brands such as Jeep, Dodge, Volvo, and Mitsubishi had sales in the range of 1.500 units.

But as of January first, according to the sumptuary tax approved, those vehicles listed over 170.000 Argentine Pesos must pay an extra duty of 30% and for those over 200.000, the duty is 50%, which is geared to promote the sale of vehicles made in Argentina.

This also helps to understand the avalanche of sales before the end of the year of imported cars, not only to save on the announced tax but because their value in Argentina was calculated with the dollar at 6.20 Pesos while in the parallel market it was hovering 10 Pesos. In a country where saving in dollars is virtually banned and access to dollars is very limited, buying expensive cars at a 'subsidized' cheap dollar was a good deal.

Furthermore the administration of President Cristina Fernandez has decreed that the overall import of top-brand cars be shaved by an average of 20% as of this month, which adds a question mark for dealers of vehicles from overseas.