Argentina is reducing car imports in this first quarter of 2014, especially from Brazil, which supplies about half of the light vehicles sold in its neighbouring country.
Argentina spent US$5bn on car imports last year.
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Volume will be but 20% to 27.5% for each automaker.
This variance will make it difficult for foreign automakers, long under pressure to cut exports to Argentina, to discuss quotas collectively.
Argentine currency has been under pressure for some time and the peso has lost over 30% versus the US dollar in just two months.
The government had intended the car import cuts to account for $300m in reduced foreign exchange spend by the end of March but the peso devaluation is likley to slow sales anyway by making imported cars more expensive.
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By GlobalDataThere were 950,000 new registrations last year.
A newly imposed tax on luxury goods, whether imported or locally made, is also hitting sales of all kind of vehicles, from cars to motorcycles. The tax is 30% on cars ranging from 100,000 to 170,000 pesos ($13,000 to $22,000) and 50% for those priced above 210,000 pesos ($28,000).
The currency devaluation greatly widened the number of vehicle models hit by the new tax and it is likely the government will now review the price ranges to which it applies.
Argentina is by far the largest buyer of Brazilian made vehicles, accounting for 60% of all CBU units shipped from Brazil last year, almost 300,000 vehicles.
This volume alone helped Brazil to reach the 2013 record production of 3.74m cars plus light and heavy commercials.
Argentina also accounts for the bulk of Brazilian auto parts exports.
While, on a value base, the vehicle trade balance between the two countries is even, for auto parts, engines included, Brazil currently enjoys a mammoth surplus.
From the wires: Argentina braced for first day under relaxed forex controls
