By Daniel Walker Guido. Having survived the Mexican peso devaluation and the subsequent "Tequila Crisis" when the Mexican economy collapsed in 1994, Pulte Corp., one of the largest American home builders, is not too concerned that its new Argentina adventure will sour.
Pulte sold 70 single-family homes in the suburbs surrounding the capital of Buenos Aires in 2001. This year, the Michigan-based builder hopes to construct 300. But the Argentine economy is doing anything but cooperating. The nation's crushing debt load recently forced it to default and devalue its currency, the Argentine peso. Now, the economy there is in shambles.
"Of course, the economic and political occurrences in Argentina are not the most ideal situation for Pulte," says Wayne Williams, president of Pulte International. "We believe there is a chance, however, to increase market share and employ low-cost sales and marketing practices to build the Pulte brand name in the area."
Pulte, which had hoped to target the top 11 percent of the Argentine market with its very American model homes, now seeks to sell only to the top 6 percent. The more wealthy Argentines are expected to be more recession- and depression-resistant. Pulte's $195,000 to $250,000, four-bedroom, two-story homes, with English names like "Spencer," "Stanford," and "Cambridge," often include whirlpool tubs, granite countertops, ceramic tile, wood floors, bathrooms with bidets, and maid's quarters instead of laundry rooms.
Photo: Courtesy Pulte Corp.
Despite the current economic upheaval there, Pulte was praised by a prominent home building source, who requested anonymity. Pulte, he says, "shows a lot of innovation going into Argentina and being the first to sell American-style housing. With Argentina builders going bankrupt and closing, as long as Pulte maintains good controls, doesn't buy too much land, and handles the currency fluctuations, it is in the catbird seat."