Argentina's Auto Parts Industry Stumbles Under Milei's Liberalization

Imports of auto parts surged after President Javier Milei lifted tariffs, pressuring domestic producers. Suspenmec, a family plant near Buenos Aires, saw capacity fall and sales slide about 30%. National auto-parts output fell 22.5% in the first two months of 2026 versus the same period in 2025; vehicle assembly dropped 19% in Q1.

Reuters

Milei’s program, launched after his 2023 inauguration, cut tariffs and strengthened the peso to curb inflation. While macro-economic indicators improved, the policy exposed manufacturers to cheap imports, especially from China.

Reuters

Affected firms include Suspenmec, Grupo Corven, and multinationals such as Sweden’s SKF and U.S. Dana, which have scaled back Argentine operations. Industry bodies AFAC and INDEC supply data; economists Andrés Civetta (Abeceb), Ricardo Delgado (Analytica) and Nicolás Ballestrero (Grupo Corven) have commented.

Reuters

• Auto-parts imports rose 11.6% in 2025 to US$10.32 bn; Chinese imports jumped 80.9% YoY to US$1.46 bn.

Reuters

• Brazil stayed the top supplier.

Reuters

• The sector lost ~5,000 jobs in 2025 (?10% of its workforce).

Reuters

• Unemployment rose to 7.5% in Q4 2025.

Reuters

• Manufacturing fell 8.7% in February 2026, while mining, agriculture and fishing grew 8-15%.

Reuters

• The peso appreciated 10% versus December 2024, implying comparable dollar-inflation pressure.

Reuters

Suspenmec partner Lucas Panarotti warned that duty-free imports from many brands erode the firm’s market. Grupo Corven CEO Nicolás Ballestrero called the situation a “turning point” as open trade pressures Argentine industry. Analytica economist Ricardo Delgado said the peso’s 10% appreciation creates major difficulties for firms competing with imports.

Reuters

Analysts note that sectors hit by the reforms generate more jobs and tax revenue than the expanding commodity export segment, threatening the fiscal surplus the government seeks. The loss of 5,000 auto-parts jobs and an 8.7% manufacturing decline have amplified concerns ahead of Milei’s 2027 re-election, with his approval rating slipping to 36%.

Reuters

The government declined comment on the sector’s woes. INDEC reported the output decline without publishing absolute volumes, limiting precise assessment. Data on workers shifting to informal jobs, such as ride-hailing, remain anecdotal.

Reuters

• “It is worrying. We feel the impact of (duty-) free imports from so many brands,” — Lucas Panarotti, Partner, Suspenmec

Reuters

• “It is a turning point. We very quickly entered a new ecosystem, where the opening of the economy and international trade has put pressure on Argentine industrial companies,” — Nicolás Ballestrero, CEO, Grupo Corven

Reuters

• “With a peso that has appreciated 10% versus last December, implying 10% dollar inflation, there will be many difficulties for companies that produce and compete with imports to do so successfully,” — Ricardo Delgado, Economist, Analytica

Reuters

Consultants project that Argentina could raise annual light-commercial-vehicle exports to 400,000 units, up from 280,000, mainly to Brazil and other Latin American markets. The sector’s adjustment will depend on export diversification, the path of Milei’s reforms, and the political climate surrounding the 2027 election.

Reuters