Increasingly empty dealerships: prices above inflation and curbing demand fully impact the car market

In the Association of Dealers (Acara) they estimate that some 35,000 fewer cars could be patented than those planned for the rest of the year with the greatest import restrictions

Some showrooms are practically empty; others not so much, but they only offer national cars. Imported vehicles have been in short supply since last year and the scenario will worsen in the coming months. The economic team led by Sergio Massa has already warned the automotive terminals that they must reverse between September and December the deficit trade balance that they registered until now and this will inevitably lead to a market with far fewer imported cars than there are today. In the midst of this context, demand slackened, but the scarce supply means that prices remain sustained. Like every month, new lists will arrive at the beginning of September with increases of between 5% and 7%, industry sources anticipated.

“We are the same as three months ago but with a more aggravated situation. Vehicles are missing; there are no small cars. If imports are notably restricted, as we are already seeing in August, when not a single SIMI was released, we could reach a very significant shortage in the country, since the average number of cars that have been entering is around 15,000 units per month” , he assured Infobae the president of the Association of Dealers of Argentina (Acara), Richard Salomewho added that even if they released 50%, patenting would fall by some 35,000 units in the rest of the year compared to what was originally planned.

Like every month, new lists will arrive at the beginning of September with increases of between 5% and 7 percent

In 2021, 183,000 vehicles entered, and for this year an import of 220,000 with a slight recomposition of stocks was expectedbut the current context changed expectations. If dollars do not come in in the coming months from agriculture or some other source of financing, the year will close with sales below the estimated 400,000. Although higher than that of 2021, this number was already a low figure, but the restrictions on imports, the lack of financing and the drop in the purchasing power of customers make it forecast, according to Acara, numbers close to that new floor both in 2023 as in 2024.

Some dealers claim that consumption eased in the last two months -after the new peak in July generated by the widening of the exchange gap- due to the lack of product in the salons, while others attribute it to the fact that credit became more expensive, the prices of vehicles continue to rise in line with inflation or more every month and consumers have their pockets hit harder. What is perceived, in general, are fewer queries, but the reason could be multiple. Even this context of great economic uncertainty and devaluation expectations also generate a retraction on the part of consumers and wait to make a purchase decision.

Dealerships have national vehicles but very few imported units
Dealerships have national vehicles but very few imported units

“The client today is not going to buy what there is. He doesn’t want it. But the main reason why demand cools is the cost of financing, ”said a Renault dealer, who has six national models of the French brand in his living room to market. Not only did the rates rise, but the terms granted by the financial institutions of the terminals are short (up to 18 months), so the monthly fee is high. Today the cheapest cars available are around $3.5 million and about 50% of the operations are made through pledge loans. Also through savings plans that, according to various sources in the sector, continue to be in demand.

People find out, bank the wait, buy some savings plan with the one that they will have the car before and also play with the parity of the dollar. In July a little more was sold. But then he loosened up. There is no sustained demand, that is why perhaps the lack of cars is not so noticeable, ”said another dealer, in this case, from Volkswagen, which has the Taos and Amarok models, of national origin, in stock.

For its part, from Car One, its Marketing manager, Hugo Raffinettiassured that “what moves the most is the used and the savings plans” and that they have a policy of not selling anything that is not in stock or insured by the terminal. “The market is with very high prices. The used ones are worth like 0 km. But the experience we see in the user is that people buy cars with a few kilometers and take it away in a week. What we cannot guarantee when it will arrive and at what value we do not sell, while what little there is is gone right away, “said the manager.

Today the cheapest cars available are around $3.5 million and about 50% of operations are made through pledge loans

Raffinetti agreed with his peers regarding the brake on demand after the departure of Martín Guzmán from the Ministry of Economy and added that consumers are not getting rid of their cars from 2018 to the present. He also said that they are making a special campaign to take cars with little antiquity because they need to have used ones to move the market. At 0 km, today Car One has the FIAT Chronos, the Peugeot 208 and the Chevrolet Onix available. From Renault, they have utility vehicles, and nothing from Volkswagen.

The one who wants to buy wants to buy more than before. The problem is that what has worsened is the supply. It seems to me that there are many people who no longer want to buy what is in the gondola. People got tired”, said the FIAT, Citroen and Jeep dealer, Roberto Blasiza. And he highlighted: “There have been fewer consultations in recent months, but there is so little supply that it is hidden and it seems that it is enough. The fact that there are fewer products makes it seem that the market has cooled down, but it is dissatisfaction, pent-up demand”. If the market operator pointed out that price increases are around 5% to 7% every month, if there were good financing and more supply, the demand would be reactivated.

Several sources in the sector agreed to ensure that today the overprices that abounded last year are over. But neither can dealers charge hefty surcharges on vehicles that are not available today. There are national cars and they are sold at the price they are worth, while in the case of imported cars, today there is no longer any margin to set premium pricesadmit some entrepreneurs in the sector. “The offer has become so difficult today that in some cases we cannot sell even with surcharges because there are none. But if I put a car up for sale that is imported, it goes with a surcharge because there is none,” he told Infobae the owner of another dealership.

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