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Automotive and Auto Parts Industry in Argentina

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Automotive and Auto Parts Industry in Argentina Public sector commitment and benefits Automotive and Auto Parts for the investor Industry in Argentina Information sources e public sector’s recognition of the role of the automotive and auto parts industry in driving economic development and employment translated into the implementation of different public policies. ey aim to strengthen the links in the production chain, by improving access to Government institutions international markets and promoting production complementarities with other countries. Ministry of Industry www.mit.gov.ar Automobiles – productive integration. e Domestic Auto Parts Promotion Law (Law 26,393) includes a cash reimbursement for purchases of parts and locally produced pieces for Automotive Program manufacturers of automobiles, internal combustion engines, gear boxes and axis differentials, http://www.industria.gov.ar/dni/regi with the aim of strengthening integration within the automotive chain. To this effect, a national men-automotriz/ Automotive and Auto Parts Industry in Argentina program for the development of the local auto parts industry (Programa de Desarrollo de la Industria Autopartista Nacional) has been launched to provide financing for auto parts makers Domestic Auto Parts Promotion and automotive manufacturers. e program will finance loans worth over USD 400 million. Program http://www.industria.gov.ar/blog/20 Trucks. A renewal plan for trucking fleets (Plan de Renovación de Flotas), launched in 2010, will 09/11/03/regimen-de-fortalecimient provide financial compensation and fixed-rate loans for companies to replace trucks over 30 years old. o-del-autopartismo-argentino/ Motorcycles. An incentive program for local investment in manufacturing motorcycles and motor parts (Law 26,457) provides fiscal credit and low customs duties to companies using at least A sector 40% of locally sourced component parts in their production process. Business associations and promotional entities Association of Automotive Discover the unbeatable investment Manufacturers (ADEFA) www.adefa.com.ar opportunities Arentina’s automotive and auto Association of Argentine Auto parts on the move parts industry oers investors. Manufacturers (AFAC) www.afac.org.ar Association of Automotive Dealerships in Argentina (ACARA) e Undersecretariat for Investment www.acara.org.ar Development offers professional assistance for Association of Manufacturers of your business to succeed in Argentina. Engine Parts in the Argentine Republic (AFYDREM)v What the Undersecretariat for Investment Development www.afydrem.com.ar can do for you: Chamber of Importers, Manufacturers and Exporters of Motor Vehicles in » Provide timely and relevant information on business sectors Argentina (CIFEMA) and geographical locations in Argentina. www.cifema.org.ar » Help identify investment and innovation opportunities in Argentine Chamber of Motorcycles (CAM) www.cam.org.ar strategic sectors. » Facilitate the investment process and doing business in Argentina. » Assist in building partnerships between foreign investors and local companies. Secretariat of International Trade and International Economic Relations Undersecretariat for Investment Development Contact us: [email protected] www.inversiones.gov.ar + 5411-4328-9510 2011 Automobile manufacturing plant in El Palomar, Buenos Aires Province. Photo: ProsperAr – Enrico Fantoni Arentina: tradition, knowlede and Argentina: a platform for tradition and innovation Why invest in the innovation for a fast-movin industry Automotive and Auto Parts Industry in Argentina? Mercosur is one of the top“ markets for PSA Tradition, installed capacity Peugeot global and innovation development strategy. With a track record of over 60 years, Arentina’s consolidated automotive Moreover, the continuous and auto parts indury ranks second investments in our in terms of produion volume in South production center in America. Both automotive and auto part manufaurers have the skills and El Palomar confirm indurial know-how required to meet Argentina´s great the mo demandin international andards, faors that foer the possibilities as a regional development of new produs and sourcing hub technoloies in line with the late e automotive and auto parts industry represents almost 8.5% of Argentina’s industrial gross production value, playing a key ” lobal trends. role in job creation and technology transfer. Most companies are located in the provinces of Buenos Aires, Córdoba and Santa Fe. JAVIER VARELA SOBRADO Front-line international automotive manufacturers—Fiat, Ford, General Motors (GM), Iveco, Mercedes Benz, Peugeot-Citroën, PRESIDENT AND GENERAL DIRECTOR Specialized human PSA PEUGEOT CITRÖEN ARGENTINA resources Scania, Renault, Toyota and Volkswagen—have chosen Argentina as a production and export platform. ey employ over 27,000 e sector’s labour force is comprised people throughout the country. e auto parts sector encompasses over 400 companies and employs more than 63,000 workers. of highly skilled and experienced workers, representing the diverse qualifications needed for every stage of the production process. e National Network of Professional Preferential access to regional markets Trucks. Big opportunities From Argentina to the World Training (Red Nacional de Formación In addition to a dynamic domestic market, as a member of MERCOSUR, Argentina has Mercedes-Benz and IVECO are the main companies manufacturing vans, trucks and Basso S.A., an Argentine auto parts Profesional), a joint initiative between preferential access to Brazil, an expanding market and the main export destination for passenger buses in Argentina. e country’s sustained economic growth has spurred company, has earned world player status. the government and key labor unions, the local industry. MERCOSUR countries share a common external tariff of 35% for demand in this segment. Today, a strong economic outlook and newly implemented Basso produces more than 2,500 different has been in place since 2004. e finished vehicles and a tariff of 14%-18% for auto parts. Trade within MERCOSUR is support programs for the sector sustain a wide array of opportunities. Mercedes-Benz models of valves and employs over 700 network is aimed at promoting regulated by the "flex" program, which determines the level of tariff exempt bilateral will start producing a medium weight truck in 2011, as part of a plan for renewing people. e company exports 86% of its professional education in the industry trade flows. Furthermore, a Mexico-Argentina trade agreement has eliminated trucking fleets. production to 33 countries for an average at the national, provincial and numerous bilateral barriers to automotive and auto parts trade between the two value of USD 26,000 per ton. In addition to municipal levels. Public and private countries. being the only official supplier to Ferrari in universities, in addition to prestigious Motorcycles. An expanding market Latin America, Basso was selected best specialized technical institutions, offer motor parts supplier in the world by the a wide array of courses and programs Rapid recovery and growth Local economic growth also boosted motorcycle sales, an increasingly popular means of transport in Argentina, particularly in large urban centers. While global leaders and local PSA Peugeot-Citroën Group nine years in science, industrial design and running, with a consistent record of zero engineering, among other relevant e Argentine automotive industry made a rapid recovery aer the international companies alike are players in the local market, imports meet a significant part of economic crisis. During 2010, domestic production of vehicles rose 40%, while exports domestic demand for motorcycles. Sales reached 560,000 units in 2010. defects and zero delays. Moreover, Basso areas. was named John Deere "Partner Supplier" grew by 39%. Different programs put into place on national and regional levels have contributed to the sector’s fast recovery and growth marked by record production for the fih year running, in addition to Auto parts. An industry with high potential other awards granted over the years. From Argentina to levels in 2010 (716,000 units). MERCOSUR and the world Domestic production of auto parts for export markets has shown a remarkable performance in various niches of the production chain, such as engines, engine parts Numerous multinational manufacturers SEGMENTS and transmission chains. Notwithstanding, the sector continues to show significant Basso have chosen Argentina as their Automobiles. Promising outlook trade deficit, which suggests a range of interesting investment opportunities. Recent production and export platform. Six of Almost 695,000 automobiles were manufactured in Argentina in 2010. General Motors investment announcements and a series of government programs aimed at strengthe- every ten vehicles produced in ning the sector support projections of higher production and overall growth. Some of Argentina are exported, mainly to Brazil leads production (19% of production), followed by Peugeot-Citroën (18%), Fiat, Ford and Renault (13% each), Toyota and Volkswagen (less than 10% each). the more promising segments include plastic stamped parts, auto glass and some and Mexico. Exports benefit from engine and transmission system components preferential access to MERCOSUR Manufacturers produce over 20 different models, ranging from automobiles to utility countries as well as from different vehicles. In 2010, with an investment of more than USD 400 million, Volkswagen trade agreements with other countries launched production of the Amarok, a new pickup model produced exclusively in in the region, including Chile, Bolivia, Argentina to supply the world markets. Colombia, Ecuador, Mexico, Peru and Venezuela..
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