After a very tough start to the year, the weather in the automotive market is changing. New car registrations showed a significant recovery in July. Although the volume of operations was slightly below that of a year ago, The improvement compared to previous months generates optimism in the sector.
Following the sharp devaluation of the peso in December, car sales plummeted inversely proportional to the rise in prices. This was the scenario that marked the first four months of 2024, with negative forecasts for the rest of the year. However, a series of factors changed the outlook.
Cars: the reasons for the improvement in prospects
On the one hand, Factories and dealerships began to offer discounts which were well received by an expectant demand. Until then, buyers were not willing to validate the high prices. Another important point was the credit reappearance. Over the past two years, financing has lost importance when it comes to purchasing.
From the car manufacturers themselves – through their financial departments – and the banks began to launch more attractive lines of financing, with lower rates and better terms. All this favored by a reduction in the rates of monthly inflation rates brought calmer market and an improvement in the purchasing power of a part of society.
The improvement in the supply of vehicles due to the growth of imports is also beginning to be a variable to take into account. This greater competition put a brake on the rise in prices. The other issue that played a key role, at least in July, was the widening of the exchange rate gap which acted as a stimulus to demand.
With all these changes, the market is showing signs of reversing the trend and that This is reflected in the projections that brands are making for the remainder of the year. By the end of 2023, the annual market was estimated at around 350,000 units, well below the 450,000 in 2023.
Despite the difficult situation at that time, some companies predicted a year divided into two parts: a bad first semester and a better second semester. Apparently, that is what is happening. With more than 40,000 vehicles sold in July and a similar or higher figure for August, the outlook is improving.
Cars: What numbers does the market expect to close the year?
In the meetings held by the car manufacturers at ADEFA, they already speak of a market of more than 390,000 0km as a floor and up to 430,000 as a ceiling. In this way, The drop compared to last year would no longer be 20% or 25%as was predicted last December, but could be only 10%. Or even less.
That is why the sector is closely following what is happening with the registrations in August. Although only a few days have been counted, there is an increase of more than 10% compared to last July. The data is very provisional and it is possible that this growth will be cut back. In reality, they expect a month similar to July – which would already be positive – but no one rules out that it could close a few percentage points above last month.
During the presentation of the new Peugeot 2008, the president of the Stellantis Group and head of ADEFAMartin Zuppiconfirmed the change in expectations.
“The car market took a significant turn compared to the first half of the year and we see a better second half of the year. We are going to exceed 380,000 units,” he said. To this forecast we must add the percentage of sales in the heavy commercial vehicle segment. The CEO of Volkswagen Argentina, Marcellus Puig, also expressed himself in this line, estimating that The total market for the year could exceed 400,000 units.
Source: Ambito
