Sunday, June 4, 2023

Chinese cars paid for with yuan at official prices

The central bank does not sell dollars to the importer: it uses a “swap” of reserves in Chinese currency equivalent to US$5,000 million. Around 800 vehicles have been sold so far this year.

Who has ever seen Yuan? Unlike the dollar or even the euro already blown up by Perón in 1948, the currency of the People’s Republic of China is not viewed by savers as a haven of value.

However, there were about 800 buyers of the zero kilometer vehicles during the first four months of this year, indirectly securing millions of yuan from the Central Bank, which were used to pay for these imports.

With high-end imported vehicles, as Clarins reported this week, the government opted for the pragmatic route and now accepts dollar payments by the customer in cash, so as not to require the use of central bank reserves. This method was incorporated in the System of Imports or SIRA to unlock imports held back by stock for more than two years.

Since November, some 2,000 high-end units have already entered, with the dollar bill component in the price ($488 per unit, as of late Tuesday) comprising at least 50% of the final price.

The situation is different with Chinese vehicles: like all imported vehicles, their price lists are denominated in dollars. But in this case, the Ministry of Commerce and the Central Bank approve the import through the traditional route, i.e. the importer acquires the currencies at official value in the Single and Free Exchange Market (MULC). Instead of 488 pesos per dollar, buyers pay 242 pesos (closed Tuesday) per unit.

Why some cars yes and others no? The difference is the source of financing. Chinese vehicles are not paid for in dollars, but in yuan, which the central bank holds in its reserves. They are worth about $5,000 million (each yuan equals $0.14) and Chinese automakers, of course, admit they are paid with that currency.

One of the core members of the Chamber of Automotive Importers and Distributors (CIDOA) describes it this way.

“Those of us who have representation for Chinese car brands have the option of using yuan to pay. SIRAs become easier with that option. In China you can pay with dollars or yuan and the Central The bank has funds in yuan equivalent to 5,000 million dollars, half dead laughing,” he underlined.

In sales, Chinese cars aren’t exactly the leader: Overall, vehicles of that origin added 756 registrations between January and April for a total of about 150,000 (down 0.3%).

There are 13 brands of Chinese origin in Argentina, which come together in the CIDOA Chamber. With 179 patents in just the first four months of the year, the industry leader is Cherry.

Chery is one of the brands with the longest experience in the country and has an assembly plant in Uruguay. Representing Sokma Group has been for 15 years. Founded by Franco Macri, the late father of the former president, Socama was a leader in car manufacturing in Argentina in the 80s and 90s, when it was represented by ex-Sevel (Fiat and Peugeot). Franco Macri announced in 2008 that Chery would invest $500 million in a factory in the country, a project that never materialized.

Now making a similar announcement is Sabino Vaca Narvaza, Argentina’s ambassador to China, who assured in February that the company has confirmed a $400 million investment to set up a factory. Cherry’s commercial representation is still Sokama, which did not participate in that announcement. There were also no Cherry officials accompanying the Argentine ambassador.

Two other brands, Shineray and Changan, assemble small trucks in Argentina. In La Plata, local company Rallitor produces a local version of the Shineray T30 small truck. While Changan Argentina is in La Rioja, represented by Omar Daneri (cousin of Manuel Antelo), who assembles the small truck in MD201 pick-up format.

The second best-selling Chinese brand so far this year is Foton (167 units), a maker of small utility trucks. They are followed by BAIC (72 units), Haval (54) and Shinrae (54): the range of imported products for these three brands includes expensive 4×4-type trucks, whose dollar prices put them closer to their competitors in Europe or Korea. brings , The difference is that these brands can be paid for with yuan swaps.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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