Import Restrictions And Inflation To Calm Domestic Demand In 2012

New car sales in Argentina continued to outperform the used car market in 2011, bolstered mainly by the health of domestic demand amid expansionary monetary and fiscal policies and double-digit inflation. BMI, however, is sticking to its long-held view that these growth rates are unsustainable in 2012. We believe that increases in vehicle prices, restrictions on vehicle imports and soaring inflation will eventually cool some of the demand, limiting 2012 new vehicle sales growth to just above 7% y-o-y, at 918,900 units.

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