Argentina's automotive market is on track for its worst year since 2002, according to the head of a major dealer organisation.
Dante Álvarez, head of the Asociación de Concesionarios de Automotores de la República Argentina (ACARA), made the declaration at the body’s annual convention, as the country grapples with an economic crisis.
Vehicle sales, and the wider economy, began to suffer at the end of April, when the Argentinian peso suddenly weakened due to a combination of increasing energy prices, a stronger dollar and a drought that affected exports, among other elements.
The country has subsequently raised its interest rates five times, the most recent being on August 30, and it now stands at 60%.
The International Monetary Fund has agreed an accelerated $50 billion bailout on the grounds of “more adverse” market conditions.
Álvarez claimed the local automotive industry had plenty of supply, but profitability was a big issue.
As quoted in local publication Ámbito.com, he said: “There is the paradox that we still have a good level of operations but with 0% profitability. I do not know if we are going to end up losing money but we are not going to win.
“The situation is very complicated. We are working with the highest level of stocks in history, there are more cars available than we can sell from [now until] the end of the year.
“Between the concessionaires, the factories, [vehicles that are already] in the port and the ships that are coming in, plus a small part of production that they [the manufacturers] are going to have to continue doing, we have an amount…that we will not be able to sell in the remainder of 2018.
“Until we rationalise the stocks, they [the problems] will continue.”
The crisis comes after years of strong growth in car sales in Argentina, which reached more than 660,000 in 2017 as the market recovered from a slump in sales in 2014.