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Cessation of operations at Brazilian assembly companies puts pressure on Argentine automakers

In Brazil, a country that is still sensitized by the departure of Ford, Volkswagen announced the braking of its four plants for 12 days, from March 24 to April 4.

To the domestic problems, the automakers added a new complexity: the suspensions in Brazil, which were initially due to the global shortage of electronic chips and, in recent days, were expanded due to the worsening of the pandemic.

Brazil is the origin of more than half of the vehicles sold in Argentina. Among them, several of the best-selling models in the country. Brazilian factories are also important because they also send auto parts.

At the beginning of the month, General Motors extended the manufacturing paralysis in North America due to the lack of semiconductors and announced that its Brazilian factory in Gravataí would also be affected until the end of May. In that plant, it produces the Chevrolet Onix, its best-selling model in Argentina, with 2315 patents in the first two months (36% of the brand’s total).

For now, they assure in the subsidiary, it will not affect the supply of the product for the local market. What they do follow closely is the availability of chips for the Cruze, a vehicle manufactured in the country. “The situation is of daily monitoring”, they assure.

On Tuesday, union sources clarified that GM, which has two other factories in Brazil, does not plan to extend the suspension due to the strong outbreak of coronavirus. In a country that is still sensitized by the exit of Ford, on Friday, another heavyweight in the sector, Volkswagen, announced the brake of its four Brazilian plants for 12 days, from yesterday until April 4. As reported by the German, she made the decision due to the increase in the number of confirmed cases of coronavirus in Brazil and the increase in intensive care beds occupied in hospitals in that country.

Volkswagen closed 2020 with 55,725 patents, a market share of 17.2 percent. Except for the Amarok pick-up, of national production, it imports the vast majority of its line-up from Brazil. For example, T-Cross and Nivus, two of his latest big bets in the region. “We are covered. We have stock and the promise that, when activity is resumed, production for export will be prioritized,” they explain at the local subsidiary. “But, if this extends more than 12 days, we enter a ‘we will see'”, they recognize.

It is not the only automaker to make a similar decision. Volvo Cars and Scania will implement business shutdowns. And, on Tuesday, Mercedes-Benz announced the suspension of its vehicle production in Brazil between March 26 and April 6. Also, due to the worsening of the pandemic.

After a year to be forgotten by the coronavirus pandemic where the auto parts industry decreased its stock of inputs and raw materials by 60%, the sector is confident that during 2021 there will be an improvement in both manufacturing numbers and sales.


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