Argentina's economy has been growing at a fast pace since 2003, having overcome its major crisis in modern history. The automotive industry has been one of the pillars of the economic recovery in Argentina.
Some automakers are transferring investments from Brazil to Argentina to benefit from lower production costs and the rapidly growing domestic market. This is exactly the opposite situation of what happened ten years ago, when the local currency was pegged to the dollar and investments were directed to Brazil.
The strong position of the Brazilian real vis-à-vis U.S. dollar and the Argentine Peso is making Argentina a more attractive place to produce. This country is also attractive because of its growing car market. Argentine vehicle output is expected to grow by 40 percent reaching 450,000 units in 2006.
The Argentine automotive industry continues to post significant levels of growth and further increases are expected in 2007, according to BMI's latest Argentina Automotives Report. The Argentine carmakers association ADEFA expects production to reach around 500,000 units this year, with a similar number of vehicles being sold.
