After a promising start to the year, auto sales plummeted again in the second month of 2023. According to data from the Automotive Chamber of Commerce (CCA), last month 111,584 used vehicleswhich represents an 8.2% decline from what we saw twelve months ago.
Although the start of the year remains positive, given that sales grew by more than 2% in the first two months compared to the previous year, the data from the corporate group are not encouraging for the sector: after closing 2022 with a decline and having rebounded in January, second-hand vehicle sales also fell again in monthly comparison.
In January, 133,073 transfers were made for car sales, 16% more than in the second month of the year.
“We started 2023 with hope, but evaluating the performance of the second-hand market during the month of February, we again see an indicator, although we know that historically it is a month in which sales decrease, we are concerned that the figures are below the years 2022 (121,658 units) and 2021 (125,698 units),” said Alejandro Lamas, secretary of the ACC.
Used car sales started to decline in the second half of last year, due to a combination of factors prominent among which was the lack of access to new units,} due to dwindling import inventories and rising inflation. Despite a slight improvement in November, transfers decreased again last December.
With used cars there is a particular situation: although registrations of zero kilometer vehicles usually go hand in hand with sales in this sector, in recent months, when registrations have rebounded, second-hand sales have not.
A few days ago, the Association of Automotive Dealers of the Argentine Republic (ACARA) reported that in February, sales of zero kilometer units (patents) rose to 30,121 units, which represents an increase of 3.5% compared to the same month of the previous year. In the first two months, cumulative sales amounted to 80,486 units, 10.8% more than in the same period of 2022.
“The underlying problems we have suffered from the pandemic, for the most part continue: for example, problems with inventories, logistics, production and lack of supplies, which are not only domestic but many of them global. Furthermore, we must underline that the financing offered by the market for the purchase of a used vehicle is practically impossible for consumers’ pockets”said the director.
One of the main points is the rising cost of vehicles and the lack of access to credit. According to a study by First Capital Markets, based on data from the Central Bank, in February pawn loans (typical for financing this type of purchase) grew by 88.9% compared to what was seen a year ago, well below of inflation for the period.
This is a significant decline in real terms. “Rising rates and lack of terms conspire against the growth of this portfolio,” said Guillermo Barbero, a partner at First.
What are the best-selling models?
According to CCA data, 6,963 VW Gol and Trend were sold last month, making it the model most sought after by used car buyers. In second place, and with 3,818 units sold, we find Chevrolet Corsa and Classic. The Toyota Hilux truck, which sold 3,341 vehicles, completes this podium.
The ranking of the 10 best-selling models in the last month is completed by the Ford Fiesta (2,587); Fiat Palio (2,502); Ford EcoSports (2,468); Ford Rangers (2,338); Ford Ka (2,253) and Ford Focus (2,259).
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.