Prestige Auto CEO Daniel Herrero Evaluates Expansion and Industrial Challenges in Argentina

Daniel Herrero, CEO of Prestige Auto and representative of Mercedes-Benz in Argentina, announced that the company is seeking a new project to utilize available space at the Virrey del Pino plant. A decision is expected before the end of the year, with the project potentially beginning as assembly and progressing toward full production. Herrero identified the electric brand Smart as a possible candidate for local production, noting that the current 35 percent extra-zone tariff on imports makes the business inviable for vehicles exceeding 16,000 US dollars FOB. He proposed a specialized industrial model for Argentina, which he described as a factory for tailor made suits, focusing on low-volume, specific series that are not rentable for larger international plants.

Regarding current operations, the Virrey del Pino plant has seen improvements under Prestige Auto, including a reduction in absenteeism from 11 percent to 2.5 percent and an increase in Sprinter production from 14,000 to 20,000 units this year. Exports have grown by over 40 percent, and Brazil has placed an order for 10,000 units for the next fiscal year. While Herrero noted that export margins are tighter than domestic sales, he emphasized that they provide essential volume and continuity.

Herrero also addressed macroeconomic hurdles affecting the sector. He stated that a stable exchange rate combined with salaries tied to inflation has increased production costs in dollar terms. He highlighted the burden of taxes, noting that taxes account for 11 percent of each exported car, and suggested implementing an export invoice system to reduce the impact of Gross Income taxes. While the premium segment remains strong, Herrero observed that the generalist market is struggling due to a lack of credit, leaving many customers unable to afford vehicles despite their desire to purchase.