Production Plummets As Unsustainable Dynamics Unwind
In November, vehicle production in Argentina contracted by 20.2% year-on-year (y-o-y), to 62,186 units, on the back of a slowdown in both the domestic and export markets. This is broadly in line with BMI's expectations, as we believed the earlier uptick was built on unsustainable dynamics.
Indeed, vehicle output has slowed down considerably in recent months after surging earlier in the year (see graph), in a similar trend to domestic sales and exports. Over the 11 months of the year to date, vehicle production has increased 6.1% y-o-y, to 746,085 units.
On the back of the substantial decline in output in November, we are revising our 2013 vehicle production forecast to 5% growth, down from 8% previously. We expect domestic sales and exports to continue to weigh on output.
|Production Drop Prompts Forecast Downgrade|
|Argentina Monthly Vehicle Production, units|