Argentina car sales hit high recordUpdated: 2013-07-03 17:52
Argentina may be struggling to keep its economy growing, but that's not the case for the country's auto industry. The latest car sales numbers hit a record high despite high inflation and slumping sales of other goods. Daniel Schweimler went to the Buenos Aires motor fair to find out why.
Argentines it seems love their cars - flocking in huge numbers to the annual Buenos Aires International Motor Show for, as the publicity tells us, a look today at what they'll be driving tomorrow. Vehicle sales in May were at a record high of nearly 90,000.
"In the first five months of this year we sold close to 422,000 vehicles which represents an eight percent rise over the first five months of 2012. We're expecting the market to keep rising and to end the year at these levels." Fernando Rodriguez, executive director of Motor Manufacturers Association said.
The roads of Buenos Aires are crammed with shiny new cars yet growth in the Argentine economy is slowing and the sales of many other items, like household goods, have slumped. The answer, at least partly, lies in the high inflation rate - which the government puts at around 10% and independent economists closer to 25.
"The reality is that in Argentina it's cheaper to buy a car with dollars. You've also got to take into account that there's a great deal to choose from in the market and the value of a used car keeps stable at a very good price so the possibility of buying a new car is better than in previous years." Fernando Rodriguez said.
Cars, which in Argentina hold their value, are simply a good hedge against inflation. The fancier the car, the better the investment but only if you look after it.
Argentine investors lovefour wheels - fast cars and slow cars, old ones and new ones, modest cars and top of the range vehicles. If it has an engine then Argentines will buy it. Anyway, it's better than sitting around and see the value of your money evaporate into thin air.