Argentina's automakers see Macri taking time to reboot economy

miércoles 25 de noviembre de 2015 20:54 GYT
 

BUENOS AIRES Nov 25 (Reuters) - Argentina's automakers said on Wednesday the reforms promised by president-elect Mauricio Macri would take a while to bear fruit in Latin America's third largest economy and they expected their sector to remain stagnant throughout the first half of 2016.

Argentina's car industry has struggled in recent years due a stagnant domestic economy and a regional slowdown, particularly in main trading partner Brazil.

Further challenges under President Cristina Fernandez were an overinflated currency, additional tax on luxury cars and trade controls that have made it hard to import necessary parts for manufacturing.

Macri, who won Sunday's presidential election, has promised to reboot the domestic economy by dismantling outgoing Fernandez's web of protectionist controls, cutting taxes and freeing up the peso.

Auto industry executives on Wednesday said such reforms would be beneficial in the long run but would cause short-term pain. A devaluation for example would hurt Argentines' purchasing power. They also did not expect a recovery in Brazil at least until the second half of next year.

"The first six months will be about getting along," said Isela Costantini, President of General Motors in Argentina, Paraguay and Uruguay, at a conference of business executives.

Thierry Koskas, President of Renault Argentina, said they were all worried about the short term, "but the auto industry thinks about the long run".

Auto production in Argentina dropped 25.6 percent on the year in October, with exports plunging 48.7 percent in large part due to the recession in Brazil, according to the ADEFA association of vehicle makers.

"The question is whether (the crisis in Brazil) will continue all next year or if we are optimistic and there will be a recovery in the second half of the year," said Enrique Alemañy, Ford Argentina's president.

"We believe that if it does recover, it will be towards the end of the year," he said, adding that he did not expect Ford's production to grow in 2016. (Reporting by Maximilian Heath and Maximiliano Rizzi; Writing by Sarah Marsh; Editing by Sandra Maler)