The pandemic has generated global supply shocks that have affected the automotive industry of luxury cars in Argentina. From a general perspective, Chinese OEM’s supply disruption, and the closure of car factories due to the pandemic, caused interruption in global value chains, and reallocation of priorities for supplying cars in other geographies, delaying some imports and new model launches in Argentina.
In 2020, the currency controls in place in Argentina allowed the black market to flourish with an unofficial exchange rate, called the blue-chip swap. As there is increasing risk perception related to the country’s fiscal policy and indebtedness, tight currency controls that are limiting the amounts in local currency to be converted into US dollars, and inflation remaining over 40%, demand for US dollars has escalated, as a savings protection method.
Lexus, Toyota's popular high-end brand of luxury cars, was recently officially launched in Argentina. With the arrival of Lexus, Toyota now competes directly with some of the most popular luxury car brands, including BMW and Mercedes-Benz.
In general, premium and luxury car sales have been adversely affected by deteriorated consumer confidence as a result of political uncertainty and increasing risk perception related to the government indebtedness. However, the economic downturn in 2020 has reduced pressure on inflation, which for the year fell by eight percentage points from 2019.
Electric models in Argentina are slowly becoming a trend, with currently four models of electric cars being sold in Argentina today: Mercedes-Benz GLC 350e (USD88,500), Nissan Leaf (USD61,600), Renault Kangoo Z.E.
Demand for premium and luxury cars has proven to be less dependent on the economic scenario in the country, as the industry targets high-end consumers with typically more capability to protect themselves against adverse economic factors. As car companies restore their supply chains after disruptions due to COVID-19, brand innovation will continue to boost premium and luxury car sales.
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This report originates from Passport, our Luxury Cars research and analysis database.
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