Industria Automotriz Argentina

[pic]








ECOLE NATIONALE DES PONTS ET CHAUSSEES & UNIVERSIDAD DE BELGRANO


MASTER IN INTERNATIONAL BUSINESS


Professional Study Project


Subject:
The Automotive Industry in Argentina

Name: Nicolás Martinez de Vedia

TABLE OF CONTENTS



1) The Argentine Automotive Industry and the Automotive Regime

2) Macroeconomic Factors
2.1) Evolution of the ArgentineEconomy
2.2) The financial system
2.3) The evolution of the government accounts
2.4) The social and economic variables
2.5) Conclusions of the chapter

3) The evolution of the Argentine Automotive Sector
3.1) The evolution of the Sales and the Production
3.2) Prices Evolution
3.3) Taxes
3.4) A Regulated Frame for the automotive industry
3.5) The Barter plan (Scrap Plan)
3.6) CompetitivePlan
3.7) Perspectives of the sector
3.8) Conclusions of the chapter

4) The evolution of the Argentine Manufacturers
4.1) Investments made in Argentina
4.2) Growth expectations vs. real growth
4.3) Productivity and capacity installed
4.4) Financial Access
4.5) Sales and manufacturers results
4.6) Conclusions of the chapter

5) The evolution of the Argentine dealers
5.1) Quantity ofDealers
5.2) Dealers Sales
5.3) Breaks even point analysis
5.4) The Consolidation of the Segment
5.5) Conclusions

6) The necessity of new strategies
6.1) The near future
6.2) The necessity of new agreements
6.3) A new export program
6.4) Agreement with the government and expected results
6.5) Specific Measures to take with the government

7) Final Conclusions

8) Appendix
Chart 1:Total Argentine Deposits
Chart 2: Sales of Vehicles in thousands units (1991- 1998)
Chart 3: Sales of Vehicles in thousands units (1999 – 2001)
Chart 4: Comparison of taxes for the automotive industry (Argentina and other countries)
Chart 5: Number of Dealers in Argentina
Chart 6: Projections made vs. Real evolution of the industry
Chart 7: Break even point analysis (in monthly sales units)Chart 8: Clue variables from the sector
THE AUTOMOTIVE INDUSTRY IN ARGENTINA


INTRODUCTION

From 1991 up to 1998 the Argentine economy and specially the automotive sector experienced a great growing that was accompanied with big investments. After this period of high growing Argentina, a recession process start in the economy. This period has been up to today of three years and theautomotive sector has suffered about this. This Professional project will explain the economic variables that impact in the automotive sector.
In the first chapter a brief explanation of the Automotive Argentine Industry will be explained. In the second chapter the macroeconomic factors that had a strong impact in the automotive sector will be mentioned. In the third chapter the evolution of thesector in general will be explained. In the fourth chapter the evolution of the argentine manufacturers will be describes. In the fifth chapter the evolution of the dealers and the different dealers network will be explained. In chapter six the necessity of a precise strategy from the government will be planned. Finally in the last chapter the conclusions of this Professional project will bedescribed.

1) The Argentine Automotive Industry and the Automotive Regime

The Argentine automotive industry is conformed by the argentine manufacturers and the spare parts providers. Up to year 1990 the industry was protected by the argentine government, however the industry was one of the most affected by the macroeconomic uncertainty and the distortion of the taxes
The demand falling down madethe argentine automotive market one of the oldest markets in the region with the same income per capita as the poorest countries of Latin America.
During the 70´s decade the manufacturing and sales in Argentina reach almost 240 thousands vehicles per year. After the historic record by that time of year 1980 (343 thousands), the economic instability made the consumption fall down to 160 thousands...