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Argentine automotive output recovers but woes persist

Thursday, April 6, 2023

Significance

Domestic automotive production has increasingly focused on light utility vehicles, spurred by local industrial capabilities and bilateral trade agreements. However, production remains far below the 2011 peak, mainly due to import and foreign exchange controls, which have obstructed imports of both intermediate inputs and finished vehicles.

Impacts

  • The existence of preferential trade agreements, which encourage intra-regional specialisation, will continue to attract new investments.
  • New investments will have a wider positive economic impact on real output, employment and international reserves.
  • Argentina’s geography, with long driving distances, suggests that initial EV demand will focus on urban public transport.

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