Furniture Market Overview

An Expert's View about Furniture in Argentina

Posted on: 23 Sep 2012

Summary

Argentine furniture production and exports grew sharply in recent years driven by the real estate boom and the economic recovery, after the profound economic crisis of 2001/2002. Local production grew 17 percent in 2011, and firms are currently reaching production capacity.

The domestic production market consists of two distinct segments: products manufactured under license from world leaders and products that are 100 percent Argentine.

The Argentine economic crisis and ensuing devaluation of the Argentine currency led to import substitution. New to market U.S. brands should be able to enter Argentina by granting manufacturing licenses to local companies. This strategy would enable them to rapidly gain brand recognition in the Argentine market and to also take advantage of lower local production costs.

Products that show the highest potential for U.S. exporters include office furniture that combines wood, glass, and metal.

Market Demand

The Argentine furniture market has changed during 2006 due to increasing competition from China and Brazil. Local production grew 17 percent in 2011, and firms are currently reaching production capacity. Furniture factories are mainly family-owned business with low production capacity.

Industry sources estimated that demand decreased between 10 and 15 percent during 2010 and 2011. Total imports of furniture decreased from $46 million in 2010 to nearly $40 million in 2011.

The market for furniture is mainly supplied by local production and imports from Brazil. The U.S. market share has remained mostly constant over the last three years, at about 3 percent. Brazil’s traditionally dominant position is explained by its trade advantages through the Mercosur trade agreement, which allows Brazilian products to enter Argentina duty free. Beginning in 2004, growth in the construction sector has been an important factor in the increase of furniture consumption. Despite price increases, design furniture benefited the most from the country´s construction boom. Argentine furniture demand is characterized by a preference of office furniture with design properties such a straight lines and the use of lightweight materials.

Best Prospects

Products that show the highest potential for U.S. exporters include office furniture that combines wood, glass, and metal.

Market Issues & Obstacles

The furniture sector has an 18 percent import duty and 0.5 percent statistics fee when imported from non-Mercosur countries, such as the United States. Products manufactured in Mercosur member countries (Brazil, Paraguay, and Uruguay) enter the Argentine market free of duty and statistics fee.

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Posted: 23 September 2012