Luxury cars: with the dollar bill mechanism, they have already authorized the entry of some 2,000 units

It is no longer an exotic rarity to see new high-end cars on the streets of Buenos Aires. Along with their ancestors, luxurious but already worn cars, with patent plates that begin with a single letter, there are now colorful 2023 models from Audi, Mercedes Benz and BMW, as well as new units from Volvo, Alfa Romeo, Kia and Hyundai.

In reality, not all of them are 2023 model, since several of the units had accumulated more than two years parked in the Zárate Customs, without being able to enter the country. The authorization came when customers were authorized to pay them with dollar bills, without demanding foreign currency from the depleted reserves of the Central Bank.

This initiative was not born from the Government but from one of the interested parties, the Chamber of Automotive Importers (CIDOA). This chamber brings together importers of automakers without factory in the country, and there converge from luxury brands such as BMW and Volvo, Korean brands such as Hyundai and Kia, to a platoon of 13 brands of Chinese origin led by Chery and BAIC.

The chamber, headed by the concessionaire and importer Hugo Belcastro, presented the idea to Sergio Massa when he took over as Minister of Economy and in a few weeks it was implemented through the Import System (SIRA). The CIDOA initiative was quickly adopted, in addition, by some companies that make up the Association of Automotive Manufacturers (ADEFA), such as Volkswagen (for its Audi brand) and Mercedes Benz. In CIDOA they estimated that with the modality of dollars in cash, imports of about 2,000 high-end units have already been unblocked, since November.

"The one who stopped the ear was Massa. He started with two or three other officials from the Economy Ministry to work on the issue and what came out was an option that has been in force since November: when you make your SIRA request, if you put "your own dollar", those requests come out. If you ask for MULC, you go to the queue, "summarized one of the importers of the chamber. The MULC is the Single and Free Exchange Market, by which it is asked to buy dollars at the price of Banco Nación (230 pesos) from the Central Bank.

A not minor fact is that many of the units that were entered into the country in these months, with patent plate equivalent to a new model, are 2020 or 2021 models.

"Some cars had been parked at the Zarate Terminal for 30 months, and the port charges its parking fee in dollars, so the price of each unit increased as time went by. But since the Argentine market still does not have a good offer, the dealer can ask for the price that the buyer is willing to pay, "summarized one of the importers.

The payment with dollars in cash is not for 100% of the unit, since a substantial part of the price charged by the concessionaire goes to the State.

"The customer deposits approximately half of the final price into the dealer's or importer's bank account. What the client has to pay yes or yes in dollar bill is everything that is not going to be asked from the Central Bank: the FOB price of the vehicle, plus freight plus the insurance of the unit until it is deposited in the port. This is what we call the CIF price," said another importer, also affiliated with CIDOA. "From then on, you pay in pesos in dollars at the quotation of the National Bank."

How much of the price is charged in pesos? Although the negotiation is between concessionaire and client, there is an important part of the vehicle that are the tariffs and different rates collected by the State, and for which the currency is the pesos and the conversion rate is the official dollar.

"The State collects between tariffs (35% of the FOB value of the unit), Statistics (3%), advance VAT and Income Tax at the time of nationalizing the unit, and then when collecting Internal Taxes, which is 25% of the price in the first band and 53.8% of the price in the highest band. After that, VAT is charged and the concessionaire pays Gross Income when billing," added the importer.