Expecting a revival of the local automotive market, Iveco has postponed a decision on transferring Argentine heavy truck assembly to Brazil, writes Rogério Louro Alves.
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In October 2001 the company announced that, because of the economic crisis and falling sales in Argentina, it would transfer Eurotech truck production from Cordoba to its Brazilian Sete Lagoas factory, in Minas Gerais state.
Now, the company has announced a “freeze” on the decision while it re-appraises the Argentine market and evaluates the country’s economy.
The huge devaluation of the peso in relation to the dollar in recent weeks makes vehicle production in Argentina more competitive and reduces the cost of export models.
The Cordoba plant will continue to produce the Eurotech heavy truck and the mid-size Eurocargo range.
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By GlobalDataLast year, Iveco announced that it planned to invest about $US18 million to adapt the Sete Lagoas plant in Brazil to made trucks. The factory was opened in November 2000 to produce Iveco Daily and Fiat Ducato commercial vehicles.
Iveco’s decision to allow more time for the Argentine market to recuperate is similar to one that DaimlerChrysler took at the end of last year – following a study not officially divulged – that scutinised shifting Mercedes-Benz Sprinter commercial vehicle range production from Argentina to Brazil.
DC calculated that it needed to invest about $US50 million to transfer the assembly line to Brazil and concluded that it should not spend such a sum without a long-term analysis of the Argentine market.
After deciding to stay in Argentina, DC began building the new generation Sprinter there to supply the local market and also export to other South America countries and South Africa.
