BMI's Executive Summary

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Argentina's automotive industry looks set to end the year on a high and forecasts for growth in 2008 are positive. As industry data reveal, vehicle sales, output and exports continued to surge during the first nine months of the year, at times hitting record levels. Industry majors such as Volkswagen (VW) continue to invest in Argentina buoyed by the gains they have already made in the country and keen to tap opportunities for further growth. In keeping with its score on output potential on BMI's Business Environment Ranking, Argentina has emerged as a crucial production base, providing cheaper costs and a key platform for exports across Latin America.

According to data from the Argentine carmakers' association, ADEFA, vehicle sales totalled 416,469 units during the first nine months of 2007. The top three manufacturers, VW, General Motors (GM) and Peugeot Citroën all reported significant gains against the same period a year earlier. VW, for example, saw its sales climb by 20.4% year-on-year (y-o-y) to 84,224 units. GM's sales were up by 22.5% y-o-y to 68,436 units, while Peugeot Citroën reported sales of 59,652 units, an increase of 25.7% y-o-y. BMI is expected sales for 2007 to come to 543,933 units in line with industry expectations that full-year sales levels will be similar to levels of output. While we expect economic growth to buoy vehicle sales this year and in 2008, an expected slowdown over the forecast period up to 2012 means that the high rates seen this year are unlikely to be repeated.

Output growth has exceeded expectations this year. In September 2007 vehicle production hit 49,875 units, its highest level in the country's history, beating the previous record set in 1998 by some 2,949 units. During the period January-September, output rose by 25.7% against the same period a year earlier, leading industry representatives to predict that total production would surpass 500,000 units in 2007. BMI raised its 2007 production forecast to 532,780 units as a result of this.

By carmakers, GM emerged as the biggest vehicle producer for the period January-September. According to data from ADEFA, GM made 80,039 units during the nine-month period, a massive 71.6% increase on the same period a year before. Peugeot Citroën came second in the overall rankings, turning out 75,325 units, a 10.5% y-o-y increase. Output for third-ranked Ford was up by 15.1% y-o-y to 63,337 units. As mentioned above, Argentina's automotive sector continues to attract significant investment from industry majors. This proved the case again in H207 with VW earmarking investment of EUR223mn (US$316.7mn) for its plant in General Pacheco. According to company sources, VW will use the capital to manufacture a new pick-up truck that has been earmarked for sale in Argentina and for export. The investment is VW's biggest in Argentina to date, say company sources. Output at the plant will reach 90,000 units, with the addition of a third shift. Production of the new vehicle is scheduled to commence in 2009.

Contents

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Chapter 1 – SWOT Analysis

Argentina Autos Industry SWOT

Argentina Economic SWOT

Argentina Business Environment SWOT

Chapter 2 – Latin America Regional Overview

Table: Latin America Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Latin America Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Rankings

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: Argentina Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: Argentina Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Economic Contribution

Table: Argentina Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Argentina – Economic Activity

Country Snapshot: Argentina Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

LATIN AMERICA: Automotive Focus Report On Premium Cars

Regional Overview

Table: Competitive landscape: Regional Comparison

Table: Argentina-Prospects for growth in Latin America's premium car markets

Country Landscape: Argentina

Table: Argentina -Proportion of luxury brand sales relative to Argentina car market, 2002-2005

Table: Argentina-Sales of SUVs/utility vehicles by brand, 2002-2005

SWOT of Argentine premium car market

Chapter 6 – Special Focus: Commercial Vehicles

Country Landscape

Table: Argentina Commercial Vehicle Market (2000-2005)

Table: Argentina Commercial Vehicle Production (2000-2005)

Light Commercial Vehicles

Table: Light commercial vehicle wholesales by manufacturer, 2000-2005, and market share 2005

Table: Light Commercial Vehicle Production by Manufacturer, 2000-2005

Heavy Commercial Vehicles

Table: Heavy Commercial Vehicle Wholesales by Manufacturer, 2000-2005, And Market Share 2005

Table: Heavy Commercial Vehicle Production by Manufacturer, 2000-2005

Buses

Table: Buses Wholesales by Manufacturer, 2000-2005

Table: Bus Production by Manufacturer, 2000-2005

Forecast

Table: Wholesales of Commercial Vehicles And Buses by Segment, 2005 Actual And 2006-2010 Forecast

Table: Production of Commercial Vehicles And Buses by Segment, 2005 Actual And 2006-2010 Forecast

Chapter 7 – Competitive Landscape

Market Overview

Table: Argentina Vehicle Production 2005 (CBUs)

Industry Developments

Chapter 8 – Company Monitor

General Motors Regional Car Sales

Table: General Motors Regional Production

General Motors Regional SWOT

Company Profiles

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Wages (ave. per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for North & South American Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's North & South American Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: