Argentina's auto parts industry shrinks as output falls 22.5%
Updated
Updated · Reuters · May 5
Argentina's auto parts industry shrinks as output falls 22.5%
12 articles · Updated · Reuters · May 5
INDEC said output fell in the first two months of 2026, while vehicle production dropped 19% in the first quarter and SKF and Dana shut some Argentine plants.
Industry group AFAC said 2025 auto-parts imports rose 11.6% to $10.32 billion, including an 80.9% jump from China, while exports increased just 1.2% to $1.28 billion.
The squeeze from a stronger peso and austerity has cut demand, cost about 5,000 sector jobs in 2025, and highlighted wider strain on manufacturing despite Argentina's trade surplus.
Facing a flood of imports, can Argentina's auto industry survive its own government's reforms?
As Argentina's factories fall silent, can a booming mining sector save its economy?
The 2026 Industrial Crisis in Argentina: 7.9% Manufacturing Decline and Rising Unemployment
Overview
Argentina's manufacturing sector faces a severe crisis driven by President Milei's 2025-2026 economic reforms, especially import liberalization that flooded the market with cheaper foreign goods. This led to a collapse in domestic production, causing over 2,400 manufacturing company closures and 73,000 job losses by early 2026, with total business closures exceeding 22,000 and 300,000 jobs lost. Unemployment rose to 7.5%, while informal work remained high, fueling increased household debt and homelessness. The auto parts sector aims to survive by boosting exports, but structural inefficiencies and fierce competition hinder recovery. Political instability and corruption scandals have further eroded public support, complicating Argentina's path toward sustainable industrial growth.