The head of General Motors for South America, Carlos Zarlenga, estimated that this year the internal market of zero kilometer vehicles (patents) will not exceed 450,000 units. If that estimate were to be verified, it would be the worst level of sales in 13 years and even below periods such as 1994 or 1998.
The Argentine executive said that so far this year the market is falling 50% against the same month of the previous year, when the sale reached 800,000 units, and that except for an unexpected rebound, this year’s total will not significantly improve. “They will be 450,000 units, or less,” he said, in dialogue with Clarín.
– Last week the Government raised the refunds for the export of vehicles to Mercosur. Are you going to export more?
– Undoubtedly, it is good news to have taken export refunds back to 6.5%, which return distorting taxes on the chain on our exports. We received it very well. The issue is that in Brazil, although we are seeing market growth of more than 10% in the first months of this year, it is growing in direct sales businesses, such as car rental companies and fleets for companies. These are segments more aligned with the so-called entry cars (boys) and not so much with the type of product that we export from Argentina. So now, the condition to export will depend on the situation in Brazil, how much we will be able to take advantage of the growth of that market. I hope it helps.
– And here?
– In Argentina, the fall of the domestic market impacted everyone, it has been very relevant. We are already talking about a market with sales of 450,000 units, or less. Maybe during the second half of the year the number can improve but, at this moment, we have to think of numbers of that type.
– The last time that less than 500,000 units were patented was in 2006.
– And yes, it’s an important issue. The devaluation of the peso, in an industry like this one, means that prices have increased a lot, above what salaries have been adjusted for inflation. Prices have followed devaluation and wages have not. And that is noticeable when it comes to selling. Added to that, high interest rates complicate the level of activity.
– And in terms of production, Brazil’s demand does not pick up.
– We can get good news from Brazil in the second half of the year, if the reform of the retirement and pension system (of the Bolsonaro government) is approved. It is possible that this will translate into a growth of consumption in the concessionaires and I think that could boost everything. But we have to wait. We are not going to have timing of the pension reform at least until June or July. We have seen that there is a rebound in demand as consumer confidence rises. And I understand that this confidence is at this moment associated with the reform package that takes Brazil out of a long-term primary deficit and gives it a different perspective of growth. People will be much less afraid of losing their jobs or of economic slowdown.
– How is the General Motors investment in the Rosario factory?
– We continue with the investment project. It is an investment that has a very important export destination for Brazil and the rest of South America. Although the Argentine market is also very important, it is a product that is designed for the South American market.
– Do they maintain the investment amounts of US $ 300 million GM plus another US $ 200 million from their suppliers?
– Yes, they are maintained. Obviously we are looking for all the efficiencies we can to achieve the same performance with the highest investment efficiency. The project continues to move as we had announced.
– When does it go into production?
– In 2021, with the first tests at the end of 2020.
– At some point there was talk that it was not a single model, but several.
– At the moment we are talking about this investment in particular and we do not have much more to add. Another thing that happened, which was very good for us, was the agreement we achieved in Brazil with our concessionaires, unions and the State of São Paulo to announce there an investment of 2,700 million dollars to launch 30 new models during the period 2020- 2024, out of the investment in Argentin