UPDATE 3-Brazil tries to lift Mexico, Argentina trade caps as auto crisis deepens

jueves 4 de febrero de 2016 16:35 GYT

(Adds details on truck makers)

By Alonso Soto and Alberto Alerigi Jr.

BRASILIA/SAO PAULO Feb 4 (Reuters) - Brazil's trade minister called for unrestricted auto trade with Mexico and Argentina on Thursday, after data showed the local automotive sector had its worst January in a dozen years.

In a brief interview with Reuters, Trade Minister Armando Monteiro said he would propose free trade in vehicles and auto parts when he travels next week to Mexico and Argentina.

That means scrapping quotas imposed in recent years when sharp currency swings heightened trade tensions between Mexico's export-oriented auto industry and the more protectionist members of South American trading bloc Mercosur.

For Brazil, a chance to ramp up exports could bring some relief amid a crisis that has thrown one in six auto workers out of a job over the past two years, as tight credit and a deepening recession strangles domestic demand for vehicles.

Production of cars and trucks in Brazil dropped 29.3 percent in January from a year earlier, national automakers' association Anfavea reported earlier on Thursday. It was the lowest output to start the year since 2003.

January sales fell 38.8 percent from January 2015 to the lowest monthly total in nearly nine years. Compared with December, output edged up 1.6 percent and sales tumbled 31.8 percent.

A third of the industry's nearly 130,000 workers are on some kind of furlough, as automakers struggle to cut capacity without resorting to more costly layoffs.   Continuación...