Volkswagen Argentina invests
Despite the deep crisis that has been established in Argentina in recent years, the president of Volkswagen Latin America, Pablo Di Si, estimates that the company’s operation in the country should recover in 2020. In 2019, the country was the main cause of loss in the region he drives.
The company hopes to finalize, this year, an investment plan of USD 1 billion in its Argentine factories aiming at the manufacture of new products and the increase of the production relying on the export capacity of both the vehicle factory in Pacheco, with an investment of USD 850, 00 million as for transmissions in Córdoba, where USD 150 million was invested.
Projections
Despite the fact that vehicle sales in the country in 2019 fell 45% over the year 2018 and still, several projections point to a new 25% reduction in sales for 2020, the Executive thinks that the country has already reached the bottom of the well and that the trend now would be to start a moderate recovery. At this moment, the industry in the country has already accumulated 6 years of falls, which reduced the market in half, directly impacting Brazilian car exports, which has the largest foreign customer in the Argentine market.
Argentine exports to Brazil, also the largest external customer for the Argentine automotive sector, have lost strength in recent years due to the retraction of the Brazilian market and the changing consumption behavior of Brazilian customers with growing interest in SUVs and consequent disinterest in models. produced in Argentina. Today, automakers installed in Argentina only export medium-value pickup trucks to Brazil, but with low sales volumes.
Di Si considers that the Strategic Plan for Industry 2030 has been negotiated for a year in Argentina, covering automakers, auto parts, workers and the Government, to adopt incentives for the sector, is highly positive. This program had great influence from the Rota 2030 adopted in Brazil and can help the production chain to recover and, mainly, small suppliers have more access to credit that practically does not exist in the country today.
Investments to increase production and exports
Much of Volkswagen’s production in Argentina is already exported: 70% of Amarok pickups (produced at the Pacheco plant) and 95% of gearboxes (manufactured in Córdoba) are sent to factories in the group from other countries.
With the investments made, the company hopes to increase its production and consequently its exports. A portion of the USD 850 million invested in Pacheco is already in the final stages of construction on a new assembly line to produce a compact SUV that still has no defined name and that will be launched by the end of 2020. “We should export more than 70% of that model produced and a good part will come to Brazil ”, adds Di Si.
Also in the pipeline is the production of a compact medium pickup truck known as the “tarok” project, which was the name of the prototype presented at the São Paulo show in 2018. This launch is expected for 2021.
At the Córdoba plant, where manual gearboxes are produced, the investment of USD 150 million has already been finalized to produce the new 6-speed MQ281 transmission, which will be 100% exported.
