Argentina | Automotive Situation 2020

In a critical macroeconomic context deepened by the COVID-19 crisis, the Argentine automotive industry was one of the sectors that suffered most from the lockdown. However, exchange rate tensions and inflation expectations boosted vehicle sales. By 2021, we forecast a weak market recovery.

Key points

• Key points:
• The COVID-19 crisis wrote one of the worst chapters of Argentina with a collapse of GDP similar to that of the 2002 crisis.
• The automotive industry turned out to be one of the economic sectors most affected at the deepest moment of the lockdown, almost at the same level as the contraction of Hotels, restaurants and leisure.
• The growing pressure on the exchange market and the expectations of accelerated inflation triggered the consumption of durable goods.
• Argentina's automotive sector remains highly dependent on imported inputs, which is a drawback given the current shortage of foreign exchange.
• By 2021, we forecast a recovery in the demand for automotive products in the domestic market with respect to 2020, although without much impact due to the worsening of vehicle accessibility.

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