Volkswagen expects its car sales in Argentina to increase 5 percent in this year, down from an earlier estimate of 20 percent, regional Chief Executive Pablo Di Si stated on Friday, mentioning the country’s high interest rates.
A sharply weakening peso in late April spurred the country’s central bank to make a range of emergency rate hikes culminating at 40 percent, the world’s highest, and effectively closing off credit for clients.
The fact that sales are not expected to drop from 2017 is a positive indication, Di Si stated in an interview on the sidelines of an event in Buenos Aires. He noted that a weaker currency was increasing exports to neighboring Brazil.
“Argentina will keep growing this year from last year, less than expected but there will be growth,” stated Di Si, president of South America, Central America and the Caribbean, of Volkswagen’s vehicle sales.
Vehicle manufacturing in Argentina increased 20.4 percent in the first four months of 2018 compared to the same period in 2017, according to carmakers association Adefa. Exports through April boosted 31.4 percent in that period while sales boosted 13.8 percent.
“We are consistently raising the volume of exports to Brazil,” stated Di Si. “I have increased the production program from Argentina to Brazil twice this year.”
The peso has decreased 25.3 percent so far this year and is trading around 25 per dollar.