Argentina’s focus on developing its automotive parts industry

29.07.2011 By: TRANSFER based on ProsperAR

The Argentinean automotive parts industry dates back to more than 60 years ago and ranks second in the list of South American countries when it comes to production volume. Automotive and parts factories in Argentina have the knowledge and capacity needed to manage the most demanding international standards. This accelerates the introduction of new products and technologies according to the latest global trends.

The automotive and auto parts industries represent 8,5% of Argentina’s industrial production. It plays an essential role in generating jobs and technology transfer. Production is mainly concentrated in the provinces of Buenos Aires, Cordoba and Santa Fe. The sector recovered rapidly after the international economic crisis. During 2010 the domestic auto production (cars, freight and passenger transport) increased with 40% compared to 2009, while export figures showed an increase of 39%. In 2010 Argentina produced approximately 695.000 cars.

Several automotive multinationals have chosen Argentina as production and export platform, like Fiat, Ford, General Motors, Iveco, Mercedes-Benz, Peugeot-Citroen, Scania, Renault, Toyota and Volkswagen. Today sixty percent of the cars produced in Argentina are exported, mainly to Brazil and Mexico. Export is being facilitated by the preferential access to MERCOSUR’s countries and by the various trade agreements with countries in the region such as Chile, Bolivia, Colombia, Ecuador, Mexico, Peru and Venezuela. This month the Argentinean newspaper La Nación published an interview with Leonardo Maffioli, general manager of the Argentinean Socma Group (El grupo Macri), who confirmed that they are in talks with Chinese Chery concerning plans of the latter to invest USD 170 million in the installation of an auto plant (initial production 40.000 vehicles a year). 

People working in the sector are relatively qualified. Since 2004, the Red Nacional de Formación Profesional (National Network for Professional Training), an initiative of the national government and several industry associations, started to promote training programmes at national, provincial and municipal level. Additionally there is a wide range of university studies for science, industrial design and engineering and there are also several prestigious specialized technical colleges.

Economic growth has had a very positive impact on the demand for vans, trucks, passenger cars (Mercedes-Benz and Iveco dominate this market) and affected the sales of motorcycles (being increasingly used, especially in urban areas). Sales in this segment achieved a record of 560.000 units. Most of the exported auto parts manufactured in Argentina concern motorcycles and parts, and transmission chains.

Despite of the international success of the sector it continues to show commercial deficits, suggesting commercial opportunities. Foreign companies or investors should focus on auto parts that are not currently manufactured in Argentina and existing segments that need to be developed, such as seat belts, ABS-systems, airbags and pyrotechnical belt spanners, air conditioning compressors, aluminium tubes and pneumatic operators for air conditioning, steering wheels, instrument frames, light operators, switch frames for electric windows, green tires, three-layer polyimide fuel pipes, wheel rates, gear discs, brake pads, fuel filler gas pipes, fuel tank caps, power steering pumps and small electric motors for example .

Producing or supplying these parts? Please contact us for more information on market access and opportunities.