Argentine trade restrictions put a damper on Chery's sales

Gasgoo.com (Shanghai March 11) - Chery Automobile, China's leading automobile exporter, has seen its worldwide sales seriously affected by Argentina's decision to restrict vehicle imports, Xinhua reported yesterday. Chery's Latin American factory, based in Uruguay, has had a large drop in sales due to the new policies.

Daniel Villamarín, spokesman for Chery's Latin American branch CherySocmo, said that while the Argentine and Uruguayan governments held talks on trade disputes in February, they had not been any successful outcome. He confirmed that CherySocmo had no way to get around Argentine policies.

Argentina and Uruguay are both members of South American trade community MERCOSUR, who stipulates that Argentina should allow Uruguayan automobile exports of up to 20,000 units. However, Argentina has yet to approve CherySocmo's request to export 6,100 vehicles.

From the beginning of this year, the Argentine government has put a series of import restriction policies that have affected trade relations with fellow MERCOSUR nations.

As Argentine transactions make up about 45 percent of CherySocmo's total sales volume, Mr. Villamarín said that he worried that continued implementation of the policy would seriously effect the company's production and profits. 

CherySocmo's factories are supported by combined investment from China, Argentina and Uruguay of $12 million. Soon after the site's completion in March 2008, Chery's Tiggo SUV made its debut in the Argentine market. According to statistics, CherySocmo's Argentine sales were valued over $100 million, accounting for around 20 percent of Uruguay's total exports.