MercoPress. South Atlantic News Agency

Argentina's top auto industry leader calls for new markets and lower costs

“Manufacturing in Argentina depends on Brazil”, said Fiat CEO Cristiano Rattazzi

One of Argentina's main industry leaders Fiat Argentina CEO Cristiano Rattazi denied the existence of a “serious situation” in the automobile industry, “so far” and pointed out the need to “seek new markets” to reverse current downward trends in car manufacturing.

 Ratazzi admitted Argentine car production dropped by 15% over the last twelve months because of “excessive falls in Brazilian markets” and the high dependency of the neighboring country.

“Manufacturing in Argentina depends on Brazil, the government is right about that,” he explained. “We need to gain access to new international markets like Mexico and Europe” Rattazzi added and suggested the two countries ”should be partners in an adventure to compete against the rest of the world”.

Regarding the Argentine industry which has been hit by layoffs, said “workforce layoffs are up to each company” and asserted that Fiat “has no problems because Brazil keeps on buying, even more than before”.

As of next week, at least 800 and 500 workers from Renault and Iveco trucks will be sent home, according to unions sources.

Rattazzi also praised Economy Minister Axel Kicillof, whom he met on Monday at the Argentine Industrial Union (UIA) with other manufacturing leaders.

“I like Kicillof because you can talk, discuss, talk back and debate with him,” Rattazzi indicated during an interview with a local radio.

On Monday Kicillof and Industry minister Deborah Giorgi met with the top leaders of the UIA previous to a trip to Brasilia to discuss trade issues, mainly referred to manufacturing and the auto industry.

“The industrial situation, the trade balance with Brazil, inflation, which for us is a worrying issue, and restriction on material imports,” were the subjects analyzed with Kicillof and the industrial organization, according to UIA president Héctor Méndez.

Rattazzi also pointed out that both Argentina and Brazil costs will have to be reviewed since this is closely linked to competitiveness, “if we are determined to compete in other markets”.

Finally the Fiat group CEO again warned that “Argentina has drugged itself with inflation.” He insisted that ”inflation is not cured with divine things. We are coming out from a period and going through a very slow transition toward something a little bit different”.

“The government allowed inflation to grow, grow and grow and an economy to get drugged with inflation. Inflation is something that takes its time to come up and also takes its time to go down,” said Rattazzi.

However “when clear and modern rules are set, everything will begin to improve. Argentina is a rich country; there's plenty of wealth for people to be OK”.