Crisis in the automotive sector: production of auto parts fell more than 5% monthly in April

Crisis in the automotive sector: production of auto parts fell more than 5% monthly in April
Crisis in the automotive sector: production of auto parts fell more than 5% monthly in April

The automotive sector shows deep contractions in terms of production, sales to the domestic market and imports. However, auto parts exports rose in April.

Auto parts production fell 5.3% monthly in April, while in interannual terms the contraction was 0.9% and In the first quarter the accumulated loss reached -3.6%. This was reported by the Association of Argentine Component Factories (AFAC).

The numbers reflected the crisis in the level of activity of the entire automotive value chain, in a context of brutal drop in purchasing power of the population and some problems with imports of inputs.

“For the replacement market segment, when considering the sale of fuel as an approximate indicator of its level of activity, a drop was observed for the first quarter that stood at 9.5% year-on-year, and 6.2% if April 2024 is compared against March of the same year,” they explained from AFAC.

Production and internal market

Vehicle production decreased by 22.6% during the first quarter compared to the same period in 2023, closing the period with 146,267 units manufactured. When comparing the month of April against March 2024, a drop of 0.4% was observed, while if it is compared to the same month of 2023, the drop was 21.0%.

In a similar sense, INDEC data showed a 17% decrease in industrial production in the category “motor vehicles, bodies, trailers and auto parts”, due to “a decrease in demand –both internal and external–, as well as due to difficulties in the supply of imported components”.

The Sales to national automobile and utility vehicle dealers registered an accumulated year-on-year decrease of 40.2% in the first quarter.

The crisis in the manufacture of bodies, trailers and semi-trailers responded fundamentally to a drop in domestic demand for certain units – mainly trailers and semi-trailers – destined for the agricultural sector and construction activity.

Foreign trade

The exports of cars also fell in the first quarter. On the contrary, AFAC data showed that external sales of auto parts registered an increase.

Meanwhile, the imports of auto parts, according to INDEC, registered a drop of close to 20% so far this year. Particularly notable were setbacks in gearboxes, body parts and piston engines.

However, foreign purchases of finished vehicles were one of the few that showed growth in the first four months of 2024, rising more than 30% compared to the same period in 2023.

Source: Ambito

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