Buenos Aires: Porsche importer Hugo Pulenta has promised to ship products from his family’s vineyards in the Andean foothills in exchange for permits to bring his expensive cars into Argentina. Under similar agreements with the government, Mitsubishi Motor Corp’s representative will export peanuts while imported Subarus will be matched by sales of chicken feed to Chile.
President Cristina Fernandez de Kirchner is forcing sellers of foreign-made cars to become exporters of everything from bio-diesel to bottled water in return for access to an auto market that’s growing 30 per cent a year. Argentina introduced the programme in March to boost export, increase investment in local industry and shore up dwindling central bank reserves.
Not everyone is pleased. «What we’ll see, if these measures continue, are fewer vehicle imports, less variety and lower sales,» said Marcos Ferrario, an economist who tracks the auto industry at Buenos Aires-based research company Abeceb.com. «It’s very difficult to counterbalance imports of luxury cars, which are worth about $150,000 (Dh550,500) each, with sales of olives…»
Companies will have to match imports, dollar for dollar, with exports. Before signing a deal on October 13, BMW AG sales had plummeted to a near standstill after authorities blocked imports from the Munich-based carmaker.
«For the last four months we have had no new cars to sell,» said Adrian Santos, president of BMW dealership A. Santos SA, which has closed one of its two showrooms in the Buenos Aires metropolitan area.
BMW sold 18 vehicles in October, down from 270 a year ago, according to Argentina’s Car Dealers Association. Sales of the German autos fell 49 per cent in the first 10 months of the year to 1,613 models from 3,133 in the same period of 2010.
The world’s leading manufacturer of luxury vehicles has committed to exporting auto parts, upholstery leather and processed rice, according to an Industry Ministry statement.
VW gearboxes
The programme to reverse an auto industry trade deficit that reached $3.3 billion in 2010 extends beyond companies that sell imported vehicles. Among the 17 agreements signed by Industry Minister Debora Giorgi this year is one for Volkswagen AG to invest €100 million ($138 million) at its factory in the province of Cordoba to boost production of gearboxes for export.
The Argentine units of France’s Renault SA and PSA Peugeot Citroen agreed to boost exports and use more locally made auto parts to reduce their imports, according to statements issued by the ministry. As a result of the contracts, the government foresees the auto industry posting a trade surplus of $844 million by the end of 2012, Giorgi said in an August 5 statement.
The agreements don’t exempt Porsche, BMW and Fuji Heavy Industries Ltd., the maker of Subaru cars, from a 35 per cent import tax.
Argentina’s automobile industry has led a boom in industrial production as South America’s second-biggest economy — after Brazil — grew an average 5.6 per cent annually since Fernandez took office in 2007. Vehicle output is forecast by the automakers association to rise to about 840,000 units this year from 717,000 in 2010. PSA Peugeot-Citroen, General Motors Co. and Volkswagen are the three biggest automakers in Argentina, followed by Fiat SpA, Renault SA and Ford Motor Co.
Vehicle imports
Last year, Argentina imported $5.6 billion of vehicles, an 81 per cent increase from 2009, while exports rose 51 per cent to $6.6 billion, said Ferrario. In 2009 imports fell 40 per cent and exports 11 per cent, according to Ferrario.
Even with a government agreement, some importers will be forced to reduce sales because they won’t be able to meet the government’s requirements, said Abeceb’s Ferrario.
Source: http://gulfnews.com