Sharp drop in auto prices after eliminating luxury tax: discounts up to 30%

With the Senate’s approval of the labor reform, the internal tax affecting the automotive sector has disappeared. This measure has an immediate impact on the market: car prices significantly decrease in March compared to February values. The Argentine automotive market is experiencing an unprecedented reordering of prices.

Several automakers adopted different strategies in response to this fiscal change. Some—like Mercedes-Benz, operated locally by Prestige Auto—had already offered discounts in previous months, anticipating the removal of the tax. Others waited for regulatory developments to adjust their new pricing structures to the current political and economic context of the country.

How Ford Restructures Its Vehicle Offerings

Ford is the most visible example of this transformation. Since March, the brand has been operating with price reductions of nearly 30%, depending on the model. This adjustment combines two key factors: the elimination of the internal tax and the benefit from the trade agreement with the United States, which allows the import of 10,000 vehicles duty-free.

The company projected the combined impact of both decisions and announced new prices for its imported units from the North American market. The Bronco Badlands, as a prime example, went from costing US$100,000 in February to US$74,000 in March—a 26% decrease. The Mustang GT experienced a similar adjustment, dropping from US$90,000 to US$65,000, a 27.78% reduction. The Mustang Dark Horse decreased from US$97,000 to US$75,000 (a 22.68% reduction).

The F-150 line had already begun a discount strategy in December, with average reductions of 10% across its entire range. These prices, now frozen, have been adjusted to the new conditions. The F-150 Lariat HEV is now US$80,000 (down from US$90,000), the F-150 Tremor is US$85,000 (from US$95,000), and the F-150 Raptor is US$105,000 (from US$115,000).

Other Brands Follow the Same Adjustment Path

Audi Argentina confirmed it will wait for the official publication in the Official Gazette to certify the validity of the tax relief. However, it assured that the impact will be immediate, predicting a price decrease between 10% and 12%. BMW, another German luxury manufacturer, is expected to follow a similar trajectory. They have not disclosed specific reduction percentages but indicated they are analyzing the impact of the agreement with the United States.

Both brands are considering a phased strategy: first, a price reduction as a direct effect of the tax elimination; second, a further adjustment aligned with the bilateral agreement if applicable. Toyota and Lexus are also evaluating the impact on their vehicle portfolios.

It is important to note that the price reductions will not be uniform across all models previously taxed with internal taxes. Some automakers will leverage the reform to modify their commercial strategies and reconfigure their product offerings.

The Framework of the US Agreement

The trade pact negotiated by the government with the United States (still pending legislative ratification) allows the entry of 10,000 vehicles manufactured in the U.S. without the 35% extra-zone tariff. This measure aims to: facilitate the arrival of models not previously sold locally due to their uncompetitive costs, and promote reductions in vehicles already present in the Argentine market.

The mechanism operates on a “first come, first served” basis: the first to process the import will be dispatched first. Only units that enter within the quota are eligible for the tariff benefit.

For certain trucks and pickups, the agreement sets specific requirements related to dimensions and design. Only units with an independent cargo box, a minimum length of 5.5 meters, and a width of at least 2 meters will qualify for the benefit. These specifications aim to favor large pickups while excluding medium-sized trucks, which are the current core of national automotive production.

Another relevant aspect: Argentina will recognize as valid vehicles that meet U.S. federal vehicle safety standards (FMVSS) and current emission standards in the U.S., without requiring additional tests or local homologation procedures. Providing a VIN (Vehicle Identification Number) certification and a sworn statement from the manufacturer will suffice to demonstrate compliance. This mechanism speeds up processes, reduces costs, and simplifies administrative procedures for introducing new models to the market.

The combination of these measures—the elimination of the luxury tax and the free import agreement with the United States—marks a turning point for the Argentine automotive industry and the prices of cars circulating in the local market.