MercoPress. South Atlantic News Agency

Argentina tries to replace Colombia as supplier of vehicles to Venezuela

Chavez decision to cancel imports from Colombia could favour Argentina and Brazil

Argentina's car and car part manufacturers will travel to Venezuela next week to attempt to capitalize on Venezuela decision to cancel imports from neighboring Colombia. The trade mission will be led by Argentine President Cristina Fernandez de Kirchner, the Production Minister said in a press release Wednesday.

The companies “have the full political support of the President,” Production Minister Debora Giorgi said in the release.

In 2007 Colombia shipped 45.000 vehicles to Venezuela but the number plunged to 15.000 last year.

Argentina shipped an average of 21,000 vehicles to Venezuela per year in 2007 and 2008, and hopes “to significantly increase that figure in the second half of this year and in 2010, bearing in mind the suspension of Venezuelan purchases from Colombia.” the release said.

“We've got an opportunity due to the interruption of imports from Colombia, with automobiles as well as in the farm machinery, footwear and textile sectors,” Giorgi said.

Argentina's car makers have been struggling this year as slack demand due to the international financial crisis has hit sales and production. Automobile production plunged 24.1% in July from the same month a year ago, the Argentine Automobile Manufacturers Association, or Adefa, reported Wednesday.

But production rose 6% on the month, indicating demand for cars seems to be improving slightly. Month-on-month production has now risen for three consecutive months. Car makers produced 47,219 cars in July, compared with 62,179 a year earlier.

Exports were down sharply in July, declining 24.4% to 29,517 vehicles from 39,018 a year earlier. July sales to car dealerships fell 20.7% on the year to 43,471 vehicles from 54,808 a year ago, although monthly sales were up 1.2% from June.

In related news Argentine senators approved Wednesday the nationalization of the Lockheed Martin Corp. (LMT) local unit, which would see the state buy out the US aerospace firm for 17 million US dollars.

The plan, driven by President Cristina Kirchner, will see Buenos Aires retake a concession to service Air Force planes in Cordoba, currently held by the firm, which is based in the eastern U.S. state of Maryland.

Senators voted in favour of the plan after lawmakers from the lower chamber passed the measure in May.

The 1,050 workers contracted by Lockheed Martin in the country will keep their jobs, the Defence ministry said. Plans are being considered for the plant to become involved in joint Argentine-Brazilian-Chilean operations