14 Jul 20

Automotive industry suppliers migrating from Argentina to Brazil

At least three companies which 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.

Although part of the volumes produced for the OEM market in Argentina are 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 was down 33% year-over-year, dealership sales dropped 45% and exports slid 17%. 

Meanwhile, the ongoing health pandemic only compounded matters in 1H20, negatively impacting production and sales figures throughout all of Latin America. The worst, however, does seem to be over.

Authored by: Daniel Bland