Gustavo Salinas, CEO of Toyota Argentina, assured that the subsidiary of the Japanese automaker sells cars imported from Brazil and Japan at prices in pesos. below what it cost him to bring them.
“We’re selling at a loss“Salinas said, and he said that’s because even though cars went up an average of 40 percent in pesos at the end of January and were already up another 40 percent before the devaluation, Toyota didn’t raise car prices. imported models such as the Corolla, Etios or Yaris at dollar values that would allow them to guarantee their replacement.
-For people, the prices are very high.
-Yes, due to our income level. It is true that it is very expensive considering how low everyone’s income level is. Unfortunately this is what happened in Argentina.
Salinas led this Friday the industrial launch of the Toyota Hiace minibus, which began producing in the Zárate plant with a “low cost” industrial format: it uses the new regulation called IKD, launched by the previous government, which allows the import of vehicles disassembled and assembled in the country, with the addition of at least 10% local parts. In the case of the Hiace, these parts will in principle be the seats, the labor in the assembly of the engines and the rear axles.
Launch of the Toyota Hiace minibus assembled in Zárate.The investment for the new project was 50 million dollars, a small amount for a factory of Toyota’s size in the country: in the last renovation of the plant alone, from 2013 to today, over 1.2 billion have been invested dollars. already exceeds 8,600 people.
Looking ahead to 2024, Toyota, like the rest of the auto industry, has begun to stumble. It resorted to a massive purchase of Bopreal bonds, worth around $1 billion, to begin settling its dollar debt to its parent company and other external suppliers, in order to resume supply of imported parts. “It was the only alternative available and it literally took Japan 24 hours a day to analyze it,” Salinas said. Furthermore, due to declining sales in countries where Toyota exports its Hilux pick-ups, the company expects a 10% drop in production.
-Will they produce fewer vehicles this year? Clarín asked Salinas.
-In the Argentine market we come from an accumulated demand that we have never been able to satisfy and we want to give to all customers, especially what we have not been able to satisfy in the past. For example, many fleet companies that ordered large volumes and we didn’t have the capacity to deliver them. We want to give everyone the opportunity to see what is the maximum demand we can have in Argentina, so for Argentina we are not changing our production plan at all. We have some countries that are a little more complicated, like Colombia and Chile, in particular, where we are adjusting the supply based on the level of demand they have, but always with the expectation that if the situation reverses we can quickly recover the volume.
-How much is the drop in sales in these two countries?
-It is falling by 40% in Colombia and 25% in Chile. In Brazil the market is stable, it is very competitive. We have a very high market share in Brazil, very high. The market is complex because there is an oversupply of products, but we are not reducing sales. We are respecting the plans, but with great force.
–And could they reach 182,000 units produced this year in 2023?
-No, no, no, this year we are already thinking of producing between 160,000 and 165,000 units. Now, this is absolutely dynamic because, for example, in countries where sales are decreasing, in January they were increasing, so we monitor this on a day-to-day basis. But today the plan is this.
-They said that in Argentina they sell some models at a loss. What is this?
Everything that is imported. We have not recovered the cost of the devaluation. The models that come from Brazil or Japan.
-But at the same time there are six-month waiting lists for those units, right?
-It won’t be less, about three or four months. There is no immediate delivery expected.
-But today kilometer zero is unattainable. You say you sell at a loss and people can’t buy cars.
-Yes, due to our income level. It is true that it is very expensive considering how low everyone’s income level is. Unfortunately this is what happened in Argentina. And if you look at Argentina, measured in dollars in all aspects, today we find ourselves a poor Argentina. So if you look at the value of the cars, beyond all the tax effect that is there, the big problem we have is that we have to recover the income so that in many cases the vehicles become affordable again.
-Do you expect a recovery in revenues?
-Part of the premise we are having is that there is a realignment of the relative prices of everything, salaries are yet another price and they too will have to adjust upwards. Unfortunately, usually (salaries) are the last thing that gets fixed. But that’s what should happen. But if you look at Argentina, measured in dollars, it cannot be among the lowest in Latin America. This is not the reality of Argentina. I say it’s one of the highest, but at least we have to be in the middle of Latin America.
The ribbon cutting of the new Hiace was led for protocol reasons by the governor of Buenos Aires, Axel Kicillof (of Javier Milei’s government, by the undersecretary of Industry, Javier Cardini, and by the brand new president of INTI and former historic director of Toyota, Daniel, dated Afione). Kicillof strongly defended the previous government and especially his management as Minister and Deputy Minister of Economy of Cristina Fernández de Kirchner, between 2013 and the end of 2015. In this context, the current governor ensured that in 2013 the government national loaned Toyota 800 million dollars to renovate its Zárate plant.
“We analyzed the loan at that time, it was not a gift, and I was on the committee that approved that $800 million loan“Kicillof said. “This changed the history of Toyota and changed the entire history of the country,” the Buenos Aires president added.
In the front row, both Salinas and the head of Toyota for Latin America looked at him impassively, Masahiro Inoue, who speaks impeccable Spanish. But in the back rows there were exchanges of glances between the managers. At the end of the event, one attendee said quietly that Kicillof “missed the numbers a bit” when giving self-praise.
“The loan existed and was important, it’s true. But the national government at that time He lent us $200 million, not $800 million. That figure, $800 million, was the total investment we made from Toyota,” said an executive who was privy to every step of that deal a decade ago.
Source: Clarin
