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Economic crisis in Argentina leads to a halt in car sales

The economic instability of recent weeks and the record dollar in Argentina paralyzed operations in the car sales business, which was already going through a complicated scenario due to the lack of vehicle supply.

)New car prices in pesos rose from 10 to 15% in early July, after Martín Guzmán left the Ministry of Economy . This increase was also passed on to used cars, in different proportions. Faced with such insecurity, industrialists and store owners decided to stop sales.

“They stock products because they know that, if they sell today, tomorrow or later, they may have problems buying inputs with the money they in the sales of their products”, explains Flavio Gonzalez, a lawyer and professor at the University of Buenos Aires.

According to Infobae news, dealership sources point out that the exchange rate differential, in this case, unlike previous years, does not generate an opportunity to purchase vehicles. Anticipating a further increase in prices, traders try to protect themselves.

“Whoever sells takes care of the stock. The sector continues to have a major supply problem, especially for models from outside Mercosur. Domestically produced cars are the most sought after. For now, the buyer expects the value of the dollar to stabilize”, said Alejandro Lamas, secretary of the Automotive Chamber of Commerce (CCA).

According to figures released by the Association of Automotive Dealers of the Republic Argentina (Acara), in June 2022 were registered 34.906 vehicle units, which represents a drop of 1.3 % in relation to the previous month and 8.7% in relation to June of 2021.

“You may contact a seller and he will say that does not sell today. It’s not braggadocio or speculation, it’s a way to protect yourself in times of uncertainty. Today people want to get rid of the pesos, they prefer to have the car or the dollars and the market is paralyzed”, concludes Lamas.

Professor Gonzalez emphasizes that this phenomenon does not only affect the automobile sector in Argentina. . “Industry is stocking up on products and this is not just happening in car factories, but also in other sectors, including food”, he points out.

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