The executive president of the Association of Argentine Component Factories (AFAC), Juan Cantarella, warned in an interview on Infobae en Vivo that the definitive closure of Fate, the Argentine tire producing company, represented the outcome of a structural process that had the opening of imports from China as a trigger.
The news, confirmed today, generated concern throughout the sector, where more closures of companies linked to the automotive chain have not been ruled out.
Cantarella stressed that this is a situation that has been going on for several years.“It is a combination of factors, because it is not a process that started in the last six months, but rather has been going on for a long time,” he explained.
For the manager, the current outcome responds to systemic causes and not just temporary ones.“It is a systemic problem that goes beyond tax pressure or labor modernization,” said the executive president of AFAC, whose entity brings together the country’s main auto parts manufacturers.
The manager stressed that the Fate case could be repeated in other companies in the sector: “Other cases like this cannot be ruled out, possibly not of the magnitude of Fate, but it is a general process, it is not a particular issue of one company,” he noted.
The abrupt opening of imports, in a context where structural competitiveness is perhaps the central factor of the crisis.“With a very abrupt opening in which the timing does not accompany all the efforts of the Executive to improve competitiveness, effects like the ones we are seeing are produced,” Cantarella warned.
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“The vehicle is assembled and is considered from Mercosur and enters without tariffs. It is a double threat; what is produced or assembled in Argentina has a much lower local content and what is produced in Brazil by Chinese brands will also begin to cannibalize the market with those products,” he warned.
In Cantarella’s analysis, local competitiveness is also affected by rigid labor agreements and a cost structure that deviates from that of the main trading partners.“If we start comparing ourselves with China as a benchmark of the price level that needs to be reached, we are making a mistake,” he stated.
The executive also focused on the international reaction to the Asian giant’s advance.”First world economies, such as Canada, the United States, the European Union, Mexico, Brazil, are doing things with respect to China. I am referring to tariffs and ways of managing their influence. The question is what does Argentina have to do nothing. I believe that we are not more powerful than other countries and doing nothing is not very pragmatic in the short term, knowing the impact it can have on activity and employment,” he expressed on Infobaeen Vivo.
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When referring to the immediate future, Cantarella acknowledged the difficulty of projecting how many extreme cases like Fate’s could occur, although he assured that “it will not be an isolated case.”He highlighted the need to coordinate the timing of opening with a real and structural improvement in competitiveness, avoiding comparisons with economies with very different structures and rules.
He also noted that the industry is not seeking to return to strict import control schemes, as happened in 2023, when they caused uncertainty and supply problems for most companies.“Of the serious industries, none are wanting to return to those stages,” he concluded.
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