The distortion that exists in prices left new vehicles very far from the pockets of ArgentinesIn recent weeks, discounts on 0km list prices have had an impact on the prices of second-hand cars, despite the resistance of owners to validate lower values for their vehicles.
“Given the lack of clarity about what 0km is worth today, We are constantly monitoring how our sales volume is and if we have to adjust the price so that those volumes grow.. Then we look at how we did with the cars we sold. If a terminal launches a promotion for its 0km, we are going to lower the price, if we have a used one of that model, to sell it. Even if we lose money with that specific model,” said Gonzalo Menéndez, the new Country Manager of Kavak.
“Then we have to take stock and We are going to see that we are in a very particular moment, that prices are being offered below the lists and. In some way, we are going to accommodate ourselves, but we are never going to stop selling,” he added.
Despite the general decline in the market, the company specialized in the purchase and sale of vehicles shows an improvement in operations.
“What we are doing is improving our stock. We’re rotating it faster. We are selling more percentage of our stock every month. This is because we adapt quickly to setting the price that is necessary to sell. On the purchasing side, if we see that we are not able to buy the car, we make more aggressive offers. We look at both ends. You cannot buy high and sell low. There always has to be a gap for the business to close. We understand what happens to customers. We are looking at the movement we have every day,” said Menéndez.
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In this context, Sellers and buyers of used cars, when they see the disparity in prices that can exist from one dealership to another, feel distrustful..
“The advantage we have is that since the quote is online, there cannot be anything strange. If the client thinks that the price we give them is low, they will go to the private market to try to get a few more dollars from them. It is also true that when they buy or sell through Kavak they get rid of a lot of paperwork to do, time that has to be dedicated to it, which, if they do it privately, has to be taken care of by the person,” he explained executively.
The average age of the models they sell is around 7 years. “We take cars from 2010 onwards and up to 150,000 kilometers. The average mileage of the cars we sell is about 49,000 kilometers. One in four cars, 25%, are sold financed, compared to 5% of credit operations carried out in the general used market.
“What has been growing a lot in recent months is the exchange operation. They leave the car and take another one, key to key. 80% put money on top and 20% downgrade the vehicle category without spending money. The good thing about that is that you are shod. If you think the market is cheap or expensive it doesn’t matter. This is growing in participation by around 10 to 15 points. Before there were more people who were selling a used one and buying a 0km one. Today there are more people who sell a used one to buy another used one. This is good for us because what we want is for more people to sell the car on Kavak and buy another one on Kavak. The gap between 0km and used encourages this. Exchanges represent a third of our sales,” Menéndez noted.
As for what may happen with car prices in the coming months, Menéndez was cautious: “The truth is that we do not know. It has a lot to do with what happens with the prices of 0km and the potential devaluations that there may or may not be in the country.. In a scenario where the price of 0km remains the same and the dollar remains stable, I don’t see used cars going down. “If there is an abrupt devaluation and it causes the 0km to go down in dollars, that will cause downward pressure.”
