Tuesday, September 27, 2022

Cars: Why Argentina increasingly builds more pickups and fewer cars

Advisor abesebFounded by economist and former production minister dented, is a historical reference source for automotive companies. Given the firm’s regional projection, its estimates and specific studies are consumed every month by many at the main local terminals and in Brazil. Inside ABC, Andres Civeta is a consultant who closely follows everything that happens in the sector, Spoke with The Economist, former National Director of Industry between 2014 and 2020 Country About the context facing automakers and their trajectory for the years to come, amid the robust process of global change that is bringing about electrification.

– How do you see this area at this time of dollar restrictions?

To go from the general to the specific, the first thing I would say is that Automotive sector is passing through a phase of moderate growth, It has surpassed previous examples of epidemics and is in the development stage, but very modest, as one of the great conditioning factors that played a role in the development of the region. trade deficitCurrent account result of the automotive sector.

The automotive sector in Argentina can develop in two ways: o because the internal market grows or because exports increase, Since the domestic market has a clear boundary, exports are the segment that can expand production the most. With Latin America as a market, ceilings are high and exports have allowed the industry to grow hand-in-hand with Argentina’s expertise in pick-up. Although we also produce cars and even trucks, Pick-up We are even better than Brazil and the fifth manufacturer in the world,

Andres Civeta, economist and advisor to Ebecebo
Andres Civeta, economist and advisor to EbeceboPatrick Pidal

– And in this context the internal market?

– Today is the domestic market restricted, limited, as it implies an outflow of foreign currency, Therefore, it cannot grow because there is a foreign trade administration and it does not allow that market to grow further. Some local manufacturers find room to sell more units, but adding a new model to the production line takes at least three years from tooling development to suppliers. This is not a change that can be made quickly to take advantage of the situation,

National vehicles sold today account for over 50% of the total, when historically they were between 30 and 40%. But that’s because fewer cars come from outside.

– How do you see the trade balance of the region? Losses have been declining in recent years…

– Yes, the deficit was narrowing, but the Argentine industry has a structural problem: If you want to increase production, you will need more dollars to buy imported auto parts., Even in models with more local integration, over 40%, you need about 60% imported parts. If we want to increase production, we need more dollars. And that’s the problem that Argentina has today,

– The terminals are said to reach losses of the entire sector (car plus auto parts) of US$1,000 million per year. Is this number attainable or can it be obtained only through handcuffed import offer?

Under normal circumstances, this would not happen. We will have a bigger domestic market with more car sales (and more losses). To develop, many industrial sectors require imported inputs.

– If Argentina deepens its expertise in pick-up with new models, could it attract more auto parts manufacturers and thus reduce the imbalance?

– With this strategy of exporting more to Latin America, more dollars will be generated and that will be positive, yes. But auto parts also have their problems and are in the process of transformation. Not many new business establishments have been built. You don’t necessarily have to build more units (of the pick-up) to attract them, Nearby is convenient to buy (for construction), but You have to be competitive. It’s not easy, With a neighbor such as Brazil, which has a higher density of auto parts manufacturers, a much larger internal market and a comparatively more organized macroeconomy, The incentive to settle there is enormous. If someone is wondering about the area, obviously they are going to go to Brazil,

Abeseb advisory predicts that it will take time for electrification to reach the region.
Abeseb advisory predicts that it will take time for electrification to reach the region.

The automotive industry is immersed in a very intense process of transformation as a result of electrification. Can Argentina get on that wave? What should I do to not lose it?

– There’s a lot to talk about. And it’s not that easy. In the United States, compliance objectives have been set to stop using combustion cars, but it remains to be seen whether they meet them, as the industry itself has to change. In our region, the trend will come a little later. Today the world has more capacity to manufacture cars, With the high cost of investment associated with combustion cars, companies are going to try to get the most out of them. This makes us think that there is another time for combustion in Argentina and Brazil., In Brazil they are betting on continuing some of the transitions involving flex engines and non-fossil fuels, such as the one from the sugarcane they already use.

It seems to me that in Argentina several technologies will coexist at the same time until the long period of electrification arrives, There, CNG fills a niche. If we remove the gas from Vaca Muerta, the problem of gas transportation is solved and we will have an element that is less polluting than diesel, even.

The Electromobility Bill sets the year 2041 for the end of production of combustion cars. Is this a reasonable time frame or is it too close?

– It is not clear. It depends on how we think about that transformation and how Argentina can position itself on that production map. It will also depend on the decisions of the terminals. Electric cars today cost twice as much as a combustion car and, being more expensive, they sell less. Chances are they won’t be made everywhere. We’ll go to a transition process, but it’s not clear,

There is a huge potential to build cars around the world today. And the installed capacity of factories in Argentina is one million units per year. But less than 400,000 vehicles are made a year. Something similar happens with Brazil: it has the capacity to manufacture 5 million units and does very little. The key to auto plants is to scale up production to be more competitive,

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news
- Advertisement -