Boston, MA -- (ReleaseWire) -- 03/10/2014 -- Vehicle sales in Argentina increased 0.7% year-on-year (y-o-y) in December, to 88,967 units. Over the full year, sales increased 16.1% y-o-y, to 963,917 units. The market registered sharp increases in Q313, in line with improvements in broader measures of private consumption. Further, currency effects have played a large part in this strong growth in autos sales.
BMI has become increasingly bearish on the outlook for the Argentine autos sector in 2014 on the back of a devaluation of the peso, along with the likelihood for further weakness going forward, and new taxes on autos imports. On the back of these dynamics coming into play, combined with high base effects from strong growth in much of 2013, we forecast vehicle sales to decline 5.6% in 2014.
We caution that, if inflation continues to escalate, Argentine consumers may start to purchase vehicles as a store against inflation, as we have seen in Venezuela. This would serve to drive sales, but would lead to a huge increase in used car prices and further exacerbate inflation problems.
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Vehicle output has slowed down considerably in recent months after surging earlier in 2013, in a similar trend to domestic sales and exports. Over the full year, vehicle production increased 3.5% y-o-y, to 791,007 units.
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