Although Argentine car sales plunged almost 20% year-on-year in December, that figure was above local expectations and sales for the full year were up 8% on 2007.

Argentine car dealer association ACARA said it had expected car sales to be down by 30% in December.

Dow Jones reported that sales are predicted to decline at least 20% in 2009 according to Dominique Maciet, the president of both ADEFA and Renault Argentina Dominique Maciet.

Maciet said the industry may end up selling between 450,000 and 500,000 vehicles in 2009, down sharply from the 596,164 cars sold in 2008.

In response to the sharp slowdown, the government has introduced a credit plan designed to spur the sale of new cars, Dow Jones said.

The government is using funds from the recently nationalised pension fund system to offer credit for the purchase of cars at well below market rates.