MercoPress. South Atlantic News Agency

Argentina's auto sales record last year was fed on 'steroids', claims Fiat CEO

Fiat Argentina CEO Rattazzi, called for clear standing rules to boost sales and exports

One of Argentina's main industry leaders, Fiat CEO Cristiano Rattazzi. said that the boost of auto manufacturing during 2013 and record sales was fed on 'steroids' and demanded more reliability in the rules to revitalize sales.

 “The auto sales record of last year was fed on steroids such as the gap between the official and parallel dollar and the negative interest rate for those purchasing” said Rattazzi who warned that 2014 presents a completely different scenario because of inflation, higher costs and distortive taxes.

“This year following the devaluation of the Peso and the amendments to the purchasing tax, plus the fact prices were not increasing or adjusted as they should have been because of a 2013 agreement, demand has plummeted” said Fiat Argentina CEO.

Besides the Argentine government is blocking trade, has lost proportion to justify investments and take advantage of capacity, and insisted that what was needed was 'reliability'.

“Argentina desperately needs stable rules, reliability, which means unfortunately nowadays we can't estimate export volumes”.

Rattazzi also insisted that is was vital to increase bilateral trade with Brazil to ensure the auto industry can rely on reasonable scales. ”We need commercial agreements with other sectors in places such as Mexico, the European Union to cut our dependency on an only market (Brazil)“.

Nevertheless Rattazzi said that faced with falling sales the government has shown willingness to work with the private sector and Economy minister Axel Kicillof is aware of the challenge and is looking for potential markets.

”Both minister Kicillof and (Deborah) Giorgi are open to discuss how to prevent the fall in domestic sales and increase exports. Kicillof is working on agreements with potential markets and for Fiat it is important to have a fluid dialogue with the Economy ministry“, pointed out Rattazzi during the ceremony for the launching of five new Fiat models in the Argentine market.

Finally the Fiat CEO said that this year's circumstances have nothing similar to those of the 2001/02 collapse of the Argentine economy, and underlined the government is on the right path.

”The Argentine government is working in anti-cyclical measures such as financing car sales with subsidized rates, and this is positive if it is clearly established so there is reliability; we don't want an industry working on steroids”.