MercoPress. South Atlantic News Agency

Argentina April car production and sales down 32% and 29%

Argentina produced 37,262 cars in April which is 1.7% less than the previous month and down 31.8% from a year ago, the automotive manufacturers association, Adefa, reported Wednesday. April exports dropped 23.8% compared to April 2008, totaling 23,249 cars, but increased 12.6% from March. Brazil was by far the leading export market, taking about 84% of exports.

While down sharply on the year, the manufacturing and export numbers indicate a partial rebound from January and February, when the production fell sharply due to the international financial crisis. However, domestic sales are still slack.

Earlier Wednesday, the car dealership association Acara reported April auto sales of 39,768, down 29.17% on the year (56.146) and down 3.72% on the month. April's decline was more than triple the annual decline seen in March, when sales fell 8.7% on the year. The biggest sales decline occurred in the heavy vehicle segment, which fell 61.31% on year in April.

Declining auto sales and production are the result of nervous consumers who are putting off purchases amid the international financial crisis, a sharp domestic downturn and concerns about political stability ahead of a June congressional election.

Former President Nestor Kirchner, husband of current President Cristina Fernandez, warned last week that the country will “explode” if Cristina Fernandez loses her majority in Congress after the election. Mrs. Kirchner said her husband was not fear-mongering but simply describing reality.

In another sign that Argentina's economy may be in worse shape than the government wants to admit, industrial production fell again in March, according to a new report published by a the country's top manufacturers group.

March output fell 6.6% from the same month a year earlier, said the Argentine Industrial Union, or UIA, which represents the country's leading manufacturers. That puts first quarter industrial production down 10.1% on the year, the UIA said.

”As in previous months, strong declines in automotive production and base metals output, two sectors which have most contributed to industrial growth (in recent years), explain the overall decline in output,” the UIA said. “These two sectors, which represent 18.3% of industrial output, declined by 31.4%”,

UIA data contrast sharply with official government data that put March industrial output down just 0.4% on the year and first-quarter production down just 2.1%.

UIA report is considered reliable because it collects production data directly from its own members, which in many cases are the same companies consulted by Indec, the national statistics agency. In theory, economists say, Indec data shouldn't differ substantially from that compiled by the UIA itself.

In reality, the gap between Indec data and private-sector industrial estimates has widened in recent months. Argentine Production Minister Debora Giorgi last month dismissed the UIA's reports, saying they aren't accurate.

Still, virtually all private-sector economists say they believe Indec data don't accurately reflect inflation, poverty, economic growth or industrial production.

The UIA report indicates industrial production is down for the fifth consecutive month since November. Before that, production had risen uninterrupted for 72 months