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Cars: in December they expect increases between 12% and 40%

2023-12-02T02:17:59.225Z

Highlights: Cars: in December they expect increases between 12% and 40%. It is due to inflation and also due to the adequacy of internal taxes determined by the AFIP. Uncertainty about what Milei will do with this supposed "luxury" tax. Patents in November were 35,665 units.. The sale of zero-kilometer vehicles totaled 35,655 units during November, 5.8% above the same month of the previous year. Despite last month's tepid rebound, dealers are on track to close the year with an increase of 10%.


It is due to inflation and also due to the adequacy of internal taxes determined by the AFIP. Uncertainty about what Milei will do with this supposed "luxury" tax. Patents in November were 35,665 units.


The sale of zero-kilometer vehicles totaled 35,665 units during November, 5.8% above the same month of the previous year, according to the Association of Automotive Dealers (ACARA).

Despite last month's tepid rebound and the strong restrictions both for the import of vehicles and even for the production of local units, dealers are on track to close the year with an increase of 10% compared to the previous year: in 11 months they have already sold 430,636 0km units and with December sales (which are always a little lower due to seasonal issues), They would end 2022 with about 450,000 units.

"We are thinking of a market for 2024 of 8% more than in 2023, which would give us a floor of 480,000 units," said Sebastián Beato, head of ACARA.

This month the concessionaires are waiting for price lists with significant increases, both because of inflation and because of the current government's own way of regulating the market.

This month, the scales of internal taxes from which a vehicle will pay rates of 20% or 35% will be modified. According to the AFIP, the floor from which a vehicle pays internal taxes went from a retail price of approximately 10.5 million pesos to $14.7 million.

The tax collection agency uses an adjustment index every three months that it applies to the tax base, so with the current double-digit monthly inflation an index accumulated over three months shows a significant difference.

Specifically, the AFIP went from a wholesale price of $7.3 million pesos from which a vehicle pays the first scale of Internal Taxes (20%, with a final impact on the retail price of 25%) to $10.3 million.

When VAT and the dealership's commission margin are added to it, it gives automakers leeway to put together price lists of up to $14.7 million without those units "falling" into the first tax bracket.

The tax modification provides automakers with significant leeway to raise the prices of models they had by up to 40% with prices located at the limit of the lowest category of internal taxes.

For example, the two best-selling cars of 2023, Fiat Cronos and Peugeot 208 (between the two, they account for 18% of the year's registrations), were until the end of November "capped" in practically all their versions with list prices between 10.2 and 10.3 million pesos.

"The price lists have not yet arrived, but between the month's increases due to inflation and the increase in tax caps, the expectation is that there will be price increases of up to 40%," they said at a dealership that sells zero kilometers of those two brands.

In the same situation was the Toyota Yaris, another of the cheapest cars in a local market, which until November had all its versions "capped" at $10.4 million. Toyota dealers have already received price lists for December, with an average increase of 11%.

In the case of the Yaris, although with the new tax caps the Japanese brand had room for an increase of up to 40%, the increase in December was on average 12.7%. Already uncapped, the various versions of the Yaris this month range from $11.1 million to $11.8 million.

Internal taxes were updated to values that doubled the price of the unit during the second presidency of Cristina Kirchner, with rates of between 30% and 50%. Macri lowered them in his first month in office, in January 2016, and the current government has made an intermediate increase since 2019: the first scale is 20% (with an incidence of 25% on the final price) and the second scale is 35% (50% on the final price).

With this background, one of the main conjectures in the dealerships is what Milei will do with the internal taxes wrongly called "luxury", since they currently tax vehicles of the so-called B and C segments, which are the medium and medium-small, in many cases produced in the country.

"We'll have to see what happens after the 10th. But I don't think they'll do anything before January, as happened with Macri. For now, we expect December with a strong increase," they added at another dealership.

Source: clarin

All business articles on 2023-12-02

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