HOUSTON (ICIS)--Domestic sales of new vehicles in Argentina plunged 40% in June while production also fell as the country’s market is suffering the consequences of higher interest rates which so far this year have kept many buyers on the sidelines, the country’s vehicle manufacturing association said Friday.
Total domestic sales during June were 53,131 units or a 40% decline from the 88,541 units sold in the same month of 2013 and the June figure was also 4.9% lower when compared with May, the association known as Adefa added.
Adefa’s President Enrique Alemany said in the statement that a recently started programme aimed at offering buyers more attractive financing “will help to fight one of the factors that caused the drop in sales seen so far this year which was a rise in interest rates”.
Production of new vehicles in June in Argentina reached 50,904 units which represented a 20% decline compared with the same month a year earlier though it was similar to May’s output, the association added.
Argentina vehicle exports in June reached a total of 34,418 units which was 19% less than in the same month a year earlier, though represented a 14% increase from May.
The cumulative production for the first half of the year was 308,423 vehicles or a 22% decrease from the same period last year, it added. Total exports in the first half of the year were 171,375 vehicles which represented a 23% decline from the same period last year, the association said.
Most Brazilian vehicles go to Brazil. Argentina is also a key market for Brazilian vehicle exports, thanks to trade concessions the two countries grant each other under the Mercosur trade bloc started in the 1990s.
Both countries' vehicle makers associations recently reached an agreement which took effect 2 July under which Brazilians will have a maximum participation of 44% in the Argentine market while Argentine vehicle makers will keep a maximum 11% share of the bigger Brazilian market.
That accord seeks to avoid trade imbalances in the industry at a time when both countries auto industries are enduring weak markets and production declines. Brazil’s recent auto statistics showed car production there was down in May 18% from a year earlier while exports had decline 28%.
The auto industries are important consumers of several plastics and resins.