03 June 2010 23:21 [Source: ICIS news]
By Cristina Kroll
BUENOS AIRES (ICIS NEWS)--Automobile production is rising in Argentina, a trend that should increase demand for plastic parts manufactures, a key chemical end market, the president of a trade group said on Thursday.
“Without a doubt the increase in vehicles production will benefit plastic auto-parts producers, especially since the government has opened a line of accessible credit to reasonable rates for auto-parts and automotive companies,” said Hector Mendez, president of the Argentine Industrial Chamber (UIA) and the Argentine Chamber of the Plastic Industry (CAIP).
In April, the Argentine government started a financing programme to provide the automobile industry with accessible credit.
The financing programme should make the Argentine auto industry less dependent on imports, which, in turn, should benefit domestic producers, Mendez said.
Meanwhile, production continued to expand.
In April, 57,120 automobiles were made in Argentina, up 53.3% year over year, according to the Argentine Automotive Manufacturers Association (ADEFA).
The group attributed the increase to rising demand. In fact, the number of automobiles exported by Argentina grew by 100% during the first three months of the year.
During the same time, automobile sales rose by roughly 50%, ADEFA said.
Meanwhile, Fiat planned to increase production by 15% to 100,000 vehicles/year at its plant in Ferreyra, Cordoba. In five years, annual production could reach 250,000 vehicles.
In addition, Mercedes-Benz Argentina planned to invest $100m (€82m). Volkswagen Argentina was in talks to also invest $100m to expand production at its plant in Cordoba.
“Surely the completion of new projects of large volume is always good news for the level of industrial activity,” said Juan Cantarella, president of the Association of Argentine Auto-Parts Manufacturers (AFAC).
However, there were some concerns that higher operating rates will not result in more profit, said Hector Tori, president of Plasticos HT, a company that made thermoplastic auto parts.
Moreover, Tori said he worried that the European debt crisis could trickle down to Argentina, since many of the automobile plant owners are headquartered in Europe,
"If they are going through a rough period, they may take global measures that affect the branches in Argentina," Tori said.
($1 = €0.82)
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