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Argentina Autos Report Q4 2010
Market |
Automotive and Parts |
Report Type |
Market Research |
Country |
Argentina |
Published |
1 September 2010 |
Number of Pages |
62 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
In its latest Argentina report, BMI highlights some of the major internal and external risks that the country's auto sector faces that we believe will play a dampen on the country's ability to fully exploit its position as Brazil's largest trading partner. From the point of view of production, we fear the fragmented nature of its auto supplier base and the uncertainty surrounding the future course of government policy will cost Argentina new investments from potential and existing carmakers. Meanwhile, on the demand side, the temporary increase in vehicle sales brought about by inflationary pressures and boost in public spending in preparation for the 2011 elections is making us sceptical about future demand vehicle potential in the country.
A sharp upward revision in our GDP growth forecast from 1.5% expected earlier to nearly 4.3% for 2010 and an impressive 40% year-on-year (y-o-y) growth in new vehicle sales, to 318,567 units, in H110, has prompted us to increase Argentina's end of 2010 total sales expectations to nearly 625,000 units, up nearly 28.3% compared with last year. We expect this to be followed by another 9% y-o-y growth in 2011 as we expect the government to be keen on boosting consumer spending as much as possible in the run up to next year's parliamentary and presidential elections. Thereafter, however, the end of subsidies will mean that the market will struggle to maintain an average growth level between 5-6% y-o-y between 2012 and 2014, taking total sales to just under 815,000 units by the end of the forecast period.
Our total production forecast, on the other hand, has been slightly raised from almost 13% y-o-y to nearly 17% y-o-y, to 600,000 units, by the end of this year. However, in view of the aforementioned risks, we doubt whether this growth can be maintained. We therefore limit our forecast for Argentina's annual production capacity to reach over 830,000 units by 2014.
The combined effect of these risks to Argentina's growth has been that BMI expects the country, along with Venezuela, to be a significant underperformer in the region. Argentina currently occupies fourth position in our rankings with a score of only 55.1 points, compared with respective scores of 58.5 points and 57.8 points by Brazil and Mexico.
The top three carmakers, which saw their sales shrink significantly during 2009, recorded to robust recovery in their sales in H110. While Volkswagen and General Motors Company maintained their respective positions as the leading carmakers, followed by Renault as the third largest carmaker during H110, a slight underperformance by Ford Motor meant the US carmaker was pushed to the fourth during H110.
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