Automotive Industry suppliers migrating from Argentina to Brazil
More than three companies that supply the automotive industry have announced the closure of factories in Argentina with plans of migrating to Brazil. Besides chemicals firm BASF and paint and coating manufacturer Axalta – producers of automobile paints and resins – announcing plans earlier this month, France-based vehicle windshield supplier Saint-Gobain Sekurit has recently signed a resignation agreement with 150 employees, Brazilian news service Veja reported.
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Although part of the volumes produced for the OEM market in Argentina is being temporarily transferred to Brazil, the company intends to continue operating in Argentina to serve the aftermarket industry, the French firm said. Operations will continue at its unit located in the city of Tortuguitas in the Buenos Aires metropolitan area.
Argentina Auto Market:
With inflation and interest rising well into double digits and its currency weakening significantly last year, Latin America’s third-largest automobile market took a major hit in 2019.
While car and light commercial vehicle (LCV) production were down 33% year-over-year, dealership sales dropped 45% and exports dropped 17%.
Meanwhile, the ongoing health pandemic only negatively impacting production and sales figures throughout all of Latin America. The worst, however, does seem to be over.
Brazilian vehicles market:
Brazilian vehicle market fell from a record of 3.6 million in 2012, when ranked as 4th globally, below the 2 million in the 2016 (1.989.000 units) with a vertical unprecedented and unexpected fall.
The main reason behind the fall was the National Automotive Plan released in 2013 which imposed on the manufacturer's new standards in terms of contents, safety, emissions further reserving advantages to models locally produced towards the imported from outside the region.
In 2020, the market started on a flat trend, with year-to-date February sales at 376.928 (-1%).