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ECONOMY | 07-01-2020 09:12

Car industry decline underlined by 32.5% drop in production in 2019

Automobile production fell 32.5% in 2019 in Argentina compared to the previous year, with just 314,787 units manufactured – the sector's lowest level since 2004.

Automotive production, one of the historical engines of Argentine industry, slumped by a huge 32.5 percent in 2019 compared to the previous year, the Asociación de Fabricantes de Automotores (Automotive Factory Association, ADEFA) reported Monday.

In 2019, 314,787 vehicles were manufactured in Argentina compared to 466,649 in 2018, a statement from ADEFA said. That's the lowest level since 2004, according to the chamber.

In December, with nine business days of production due to the summer recess, the number of vehicles produced nationally was only 14,524 units – 46.4 percent less compared to November and a 29.1-percent drop on the same month of 2018.

Meanwhile, with just 224,248 vehicles exported, foreign sales fell 16.7 percent compared to the previous year. 

Experts said the dramatic slump was due to a sharp drop in domestic demand amid the economic crisis and a heavy fall in interest from Brazil, the main destination of Argentina's car exports.

"Production has been affected by several factors throughout the year. To the contraction of the domestic market, due to macroeconomic imbalances, there was a lower demand for
our products from Brazil, the main destination of our exports," said ADEFA President Gabriel López.

He argued that the sector had done its best to "manage this situation, but without a doubt it is essential that we find the tools that stabilise the variables of the economy and clear the uncertainty in the local market so that, added to a potential improvement in external demand, we can begin to reverse the negative interannual results that we have been registering in recent years."

Underlining the problems facing the sector, the Asociación de Concesionarios de Automotores de la República Argentina (Automobile Dealers' Association, ACARA) reported on its website that 459,592 units were patented in 2019 – 42.7 percent less than in 2018 when 803,040 vehicles were sold.

Both foreign and nationally produced vehicles are sold in Argentine dealerships.

"We have finished a year of oblivion – in fact. a very bad cycle ... [it's] an activity that has more than 1,500 dealerships across the country and is a source of employment for more than 75,000 families," said ACARA President Ricardo Salome, in a statement.

According to Acara, "the very high interest rates of the last three years, plus the lack of profitability caused the fragility of the sector" created problems during the government of the Mauricio Macri (2015-2019).

– TIMES/AFP/NA

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