Argentina's auto parts industry feels the pain from shock therapy

[SlowWalker]

Regardless, the idea that the Estado feels the need to "limit" competition between a Ford vehicle manufactured in Michigan at averages factory wages of $20-26 an hour with a Fiat made in Argentina at average wages of maybe $10 an hour (2.4M monthly) shouldn't be a concern. The clear economical advantage should be obvious to buyers when deciding between the two models, unless of course the domestic manufactured cars are so bloated with domestic taxes that they somehow cost the same, which is exactly what some buyers are complaining about.

There is a condition in CUSMA that the labour content of 40-45% for passenger vehicles and 45% for trucks must be performed in a high labour cost country (Canada/US) where the wage is $16/h or higher. So although the competition isn't on the labour cost portion of the vehicle, the US still enforces particular trade practices and this was prior to Trump's tariffs last year.

Additionally, the automobile manufacturers are given huge tax subsidies and benefits by the government when they select locations for new plants and decide to upgrade existing plants.

The general volumes produced in Argentina are much lower than the amounts produced in Canada/US and therefore fixed price portions and additional documentation and bureaucracy and higher taxation will also increase prices.

 

[LuckyLuke]

2) I also found when buying a motorcycle the costs ending up being fairly similar once all the charges were included.

Which is on it's face is absurd in my opinion. Exactly what part of the Argentine assembly line, from sourcing manufactured steel, plant assembly labor costs, dealership overhead, etc. is equivalent to the US? There should be no similarity at all between the two prices. Unless we are talking about a US car manufacturing market so heavily subsidized that it is parity with Argentine wage differences.

 

[SlowWalker]

1) it was a motorcycle, so far fewer components.
2) the components are likely shipped from overseas and assembled here in argentina
3) Argentina has higher IVA (21%), it has effectively 4-5% Gross Tax vale (between provincial and account credit/withdrawal tax). So one line item might be more and another less.
4) Again, the prices you see on American dealership sites don't include much of the other costs which need to be added in.
5) Prices are fairly similar globally to prevent purchasing in one region and shipping to another.
6) The Argentinian market supplies a population of 45M plus exports to some neighbour countries. The US market is 340M, the Canadian market is 42M people. The credit available to individuals makes automobiles far more accessible in those countries. So there is a huge element of economies of scale.
7) Certain models of cars are still shipped from Europe or Japan and not built in North America either. Now you need to also need to compare the cost of Japan labour as well.

 

[MarshallE]

Your comparison is not honest. Yes, I guess for a special used vehicle, MercadoLibre is a good suggestion, just like the car fanatics do on eBay in US. I did spend a few months researching models to buy. Quickly learned that ML is not the way. For a new car just WhatsApp the dealer from some official manufacturer dealer, they respond with the prices, then you go and test drive, talk a bit, go home think about it a bit, and then go back and transfer your money to buy. Pick it up 2-3 weeks later. I paid 60k ars for an argentina manufactured worldwide brand. The price I paid was very close to the same USD price in USA, which would have had state sales tax and destination charges added.

All new cars have the process published every month. These prices are Republished in newspapers for certain segments or whatever the editors will find interesting. Those prices are exactly what you will pay that month when you decide to buy from the dealer.

These are both brand new 0km vehicles in both instances. Milei has gotten rid of a lot of the tarriffs and taxes but due to being in Mercosur the pricing is still highly distorted on vehicles brought in from overseas. Cars made in Argentina are unfortunately quite spartan in comparison to what's available abroad nowadays

 

[elhombresinnombre]

Unwittingly, we may not even be comparing like-with-like which is further to the detriment of the Argentine made vehicle.

Almost exactly one year ago (May 8th last year but- hey- who's counting?) I told the tale of buying a brand new, latest model car...

...which wasn't.

https://baexpats.org/threads/purchasing-a-car.48861/post-461868

 

[Ries]

This article is about parts, not whole new cars. And chinese parts can really run the gamut in terms of quality. I have seen a lot of chinese parts that are far worse than industria Argentina quality, and in general, in any category, the high quality Chinese products are not available in Argentina, only the absolute cheapest ones. Except for electric cars, or iphones, made by big companies. But spark plugs or oil filters? Cheap Chinese stuff is generally terrible.

 

[ArgentinaVet]

I mean look it up yourself on Mercadolibre. Any half decent car is multiples more expensive than the same in the US, or even in Chile.

View attachment 10904

View attachment 10905
The same car in Argentina is far more expensive than in the US (114K vs 56K)

There's a reason you hardly see any luxury vehicles (BMWs, Mercedes etc) in Argentina and it's not because there's no wealth in this country.

This is a cherry picked bad example; you can buy a Ford Bronco Badlands Sasquatch, which is better in every way than that Jeep Wrangler for $75k USD (look on mercado libra) which is not much more than USA MSRP. Plus you can get the 21% IVA back as a tax credit if you have a business here.

 

[Ries]

The best deals on cars and trucks in Argentina are in categories that don’t even exist in the USA- small trucks, and tiny hatchbacks. Things like VW Savieros, Renault Kangoos, Fiat Ducatos, for instance. Anything even vaguely comparable is triple the price there. Companies sell what sells. High end 4x4 s are a small segment in Argentina and priced accordingly. The best selling car in Argentina last year was the fiat cronos, and there are several 0 km models on Mercado Libre right now for 15 million pesos. The cheapest new cars in the USA are double that, usually even more than double. I rented one for a week, last year, its a good value for the money. Yes, a gray market porsche is double the price in Argentina. When was the last time you saw one on the road here?

 

[carride]

The best selling car in Argentina last year was the fiat cronos,

Nice thing about the Kangoo is you could live out of it if you needed

Top Selling Models (Full Year 2025)
Local production continues to dominate the top ranks, with seven of the ten best-selling models manufactured in Argentina. Ford Territory SUV, manufactured in China, is in the top 15.

+------+----------------------+-------------------+--------------+

| Rank | Model                | Units Sold (2025) | Market Share |
+------+----------------------+-------------------+--------------+

| 1    | Toyota Hilux         | 30,772            | 5.0%         |
| 2    | Toyota Yaris         | 30,011            | 4.9%         |
| 3    | Fiat Cronos          | 29,870            | 4.9%         |
| 4    | Peugeot 208          | 29,048            | 4.7%         |
| 5    | Ford Ranger          | 24,957            | 4.1%         |
| 6    | Volkswagen Amarok    | 23,595            | 3.8%         |
| 7    | Volkswagen Polo      | 21,309            | 3.5%         |
| 8    | Toyota Corolla Cross | 18,148            | 3.0%         |
+------+----------------------+-------------------+--------------+

Siete de los diez modelos más patentados son hechos en Argentina, pero Brasil manda

Seguimos desmenuzando lo que dejaron las cifras de patentamientos de 2025 en el mercado local. Creció mucho la proporción de importados desde el país vecino y por primera vez un auto chino se metió en el Top 15.

eleconomista.com.ar

 

[SlowWalker]

Nice thing about the Kangoo is you could live out of it if you needed

Top Selling Models (Full Year 2025)
Local production continues to dominate the top ranks, with seven of the ten best-selling models manufactured in Argentina. Ford Territory SUV, manufactured in China, is in the top 15.
Rank Model Units Sold (2025) Market Share
1 Toyota Hilux 30,772 5.0%
2 Toyota Yaris 30,011 4.9%
3 Fiat Cronos 29,870 4.9%
4 Peugeot 208 29,048 4.7%
5 Ford Ranger 24,957 4.1%
6 Volkswagen Amarok 23,595 3.8%
7 Volkswagen Polo 21,309 3.5%
8 Toyota Corolla Cross 18,148 3.0%

Siete de los diez modelos más patentados son hechos en Argentina, pero Brasil manda

Seguimos desmenuzando lo que dejaron las cifras de patentamientos de 2025 en el mercado local. Creció mucho la proporción de importados desde el país vecino y por primera vez un auto chino se metió en el Top 15.

eleconomista.com.ar

I'm surprised the number of sales for the Hilux isn't higher honestly.
Its for both business and personal use and the quality is unmatched.
It would do a lot of damage to Ford, Chevy, GMC if allowed to enter the North American market.