Among the multiple economic consequences that the coronavirus pandemic has generated, in Argentina an unprecedented event occurred in March: the compulsory isolation decreed by the Government determined the early closure of the automotive market, 10 days before the end of the month.
As many of the procedures are face-to-face and still “on paper”, the cessation of activity of the automotive property registries meant that only patents were registered until March 19. Thus, the market suffered a crash of more than 60 percent.
After receiving this new blow, dealerships are working remotely to be able to start sales on line, which will be formalized once the registers reopen.
To do this, together with the terminals, at the beginning of April they are applying an aggressive commercial strategy: maintain March prices and deepen the bonuses.
“In several products, we maintain the price of the previous month, which in itself already constitutes a good bonus. And in parallel, in those units in which we have more stock Accumulated, we offer a very strong bonus quota. They range from 250,000 to 350,000 pesos, depending on the model and brand, “said Lucas Barrera, manager of marketing from Mundo Maipú.
On the same note, Gregorio Tagle, of Autocity, maintained that most of the brands “maintained their March prices and added some bonuses, in addition to the fact that they are offering zero-rate financing.”
“The idea is to move a totally paralyzed market,” he added.
Sebastián Parra, director of Parra Automotores, also confirmed that “the bonuses were deepened in April”. “They are between 200,000 and 400,000 pesos. This allows you to set prices to today. It is a good time to do business with a car, especially for the one that has dollars, which was devalued a little, ”said Parra.
From the Avec Group, Felipe Seia mentioned that there are benefits for purchases on line and in savings plans. “Subscriptions are without login details and there are vouchers that are applied to the total product with discounts of up to 50 thousand pesos. Before quarantine, that was not there, ”he assured.
According to Seia, today the activity in the company involves trying to advance in operations and taking steps to avoid a bottleneck when the market reopens.
“We do not focus only on sales, but also on what is advice and services. For example, what to do with the car, how to check the battery or start it a few times a week. In addition to organizing shifts in the workshop for later, “he said. In this sense, he indicated that queries to the WhatsApp channel grew by 30 percent. Barrera also maintained that the traffic on the Maipú website increased and that the objective these days is to generate leads negotiation to advance operations after quarantine is lifted. Customers, for example, can make a sign with a payment button on line and ensure the current price.
For his part, Parra commented that they are registering some web sales, but in a volume “insignificant for the structure we have as a company.”
Concessionaires, in emergency
While trying to stay active through the virtual market, the focus of the concessionaires is the same as that of the majority of Argentine companies: to arm financial engineering to be able to cover all their obligations.
According to Sebastián Parra, through various mechanisms in the company they managed to get the money to be able to cover the payment of March salaries.
But for a month from now, when the April ones have to be canceled, they already see a very difficult panorama.
“Although support measures are being launched, today we have a zero box and with very large structures. The payment chain was cut. If this continues, we are concerned, we need an emergency plan, “he said.
One issue to keep in mind, in this context, is that before the arrival of the pandemic, the automotive market was already showing very bad numbers, with the lowest patent levels in 16 years.
In this framework, a possible reactivation after quarantine would not be immediate, which has led some terminals to project a market for this year of just 200,000 cars. This figure would exceed 150,000 in 2003, a period in which Argentina was just emerging from the post-convertibility economic debacle.
The original text of this article was published on 04/04/2020 in our printed edition.
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