In addition to making the hiring and litigation scheme more flexible, the labor reform approved by the Argentine Congress included a tax chapter that fully impacts the automotive market. Among its articles, the internal tax that levied on high-end vehicles was eliminated, which has already caused losses of up to $26,000 on some 0 km models.
The tribute, popularly known as “luxury tax”applied to cars with a list price greater than 121 million Argentine pesos (about $85,000) and had a rate of 18%.
Although it has existed since the 90s, It was reformulated in 2014 when Axel Kicilloftoday governor of the province of Buenos Aires, was Minister of Economy during the second presidency of Cristina Fernández de Kirchner.
The argument was a familiar one: “defend the national industry”stop imports and take care of the deteriorated dollar reserves of the Central Bank. The problem is that, over time, it also ended up reaching mid-range models manufactured in the neighboring country, not just the “luxurious” ones.
Last year, as BioBioChile reported, Javier Milei‘s administration had suspended the first scale and reduced the second from 35% to 18%. Now, with the sanction of the labor reform, The tax on “luxury cars” was definitively eliminated.
Thanks to Milei’s initiative: immediate price reductions
After the changes in regulations, automotive companies operating in Argentina They reacted quickly with several price reductions. The Stellantis group was one of the first to anticipate and modified the price of the DS 7 E-Tense, which went from USD 90,000 to USD 72,000, that is, a drop of 20%.
But the strongest reductions came from Ford Motor Company in Argentina, which applied discounts to its models imported from the United States. Thus, the Ford Bronco 4×4 fell from USD 100,000 to 74,000 (-23%), the Mustang Dark Horse fell from USD 97,000 to 75,000 (-23%) and the Mustang GT fell from USD 90,000 to 65,000 (-28%).
In the case of Ford, the losses are even greater than expected due to the elimination of the internal tax, since a benefit derived from the trade agreement with the United States which contemplates a quota of 10,000 vehicles per year without paying the 35% tariff (still pending regulation).
The measure was celebrated by the Association of Automotive Factories (Adefa)which groups the 12 terminals with production in Argentina.
“The definitive elimination of the internal tax constitutes a key step for the sectorsince it contributes to correcting accumulated distortions in the price structure, organizing the tax scheme and providing predictability to the terminals and the entire value chain,” the entity said in a statement.
Furthermore, Adefa maintained that the new labor regulations represent “a opportunity to promote the creation of formal employment and accompany the productive transformation” of the industry.
At the same time, automotive companies decided do not increase prices in March on compact cars, SUVs and pick-ups as a reaction to the context. Although 109,045 units were patented in January and February, the figure was 4.4% below the same period of the previous year (114,090 units) in Argentina.
Comparison with Chile: the price gap with Argentina is narrowing
Despite the strong discounts applied in Argentina, the same models continue to be more accessible in Chile.
The Ford Bronco 4×4, which in Argentina now costs USD 74,000, has a price in Chile of USD 69,044 (62,140,000 Chilean pesos with one dollar approximately 900). That is to say, it is still approximately 6.7% cheaper in the Chilean market.
The Mustang Dark Horse is sold in Argentina for USD 75,000, while in Chile it costs USD 67,378 (60,640,000 Chilean pesos). The difference is 10.2% in favor of Chile.
In the case of the Mustang GT, the Argentine price is USD 65,000, against USD 61,267 in Chile (55,140,000 Chilean pesos). Here the gap is smaller, but still the model it is 5.7% cheaper on the other side of the mountain range.
