Argentina's auto parts industry feels the pain from Milei's shock therapy

By Nicolás Misculin

BUENOS AIRES, May 5 (Reuters) - Inside a small, family-run car parts works connected the outskirts of Buenos Aires, accumulation lines beryllium quiet.

The mill is moving beneath capableness arsenic the firm, Suspenmec, struggles to vie with an influx of cheaper imported parts, galore from China, aft Argentina sharply eased ‌trade restrictions.

Sales this twelvemonth are down astir 30% astatine the company, which makes 600 types of suspension parts.

President Javier Milei's assertive economical reforms - including slashing import barriers ‌and presiding implicit a stronger peso - person helped stabilize the economy. But for galore tiny and mid-sized manufacturers agelong shielded from overseas competition, the accommodation has been abrupt and painful.

Imports of car parts roseate 11.6% successful 2025 ​from a twelvemonth earlier to astir $10.32 billion, according to manufacture radical AFAC. Exports, mostly to neighboring Brazil, roseate conscionable 1.2% to astir $1.28 billion. Imports from China, meanwhile, jumped 80.9% connected a year-over-year ground to $1.46 billion, though Brazil remained the apical supplier.

"It is worrying. We consciousness the interaction of (duty-) escaped imports from truthful galore brands," said Lucas Panarotti, a spouse astatine Suspenmec, arsenic helium stood beside idle machinery astatine the factory.

Other car parts makers, including Sweden's SKF and U.S.-based Dana, person unopen immoderate of their plants successful Argentina.

Local manufacturers' struggles are reflected successful a diminution successful car ‌parts output, which fell 22.5% successful the archetypal 2 months of ⁠this twelvemonth from the aforesaid play successful 2025, according to authorities statistic bureau INDEC, which did not specify volumes.

Vehicle production, which reached 490,000 units successful 2025, fell 19% successful the archetypal 4th of 2026 from a twelvemonth earlier.

"It is simply a turning point. We precise rapidly entered a ⁠new ecosystem, wherever the opening of the system and planetary commercialized has enactment unit connected Argentine concern companies," said Nicolas Ballestrero, the CEO of Grupo Corven, which has experienced a diminution successful output and exports this year.

Experts accidental Argentina's car manufacture indispensable specialize and grow exports to adapt. Andres Civetta, an economist specializing successful the concern assemblage astatine consulting steadfast Abeceb, estimates the state could yet export ​about ​400,000 airy commercialized vehicles annually, up from the astir 280,000 shipped past year, chiefly to Brazil and ​other Latin American markets.

Argentina's authorities did not respond to a petition for ‌comment.

DELICATE BALANCE FOR MILEI

The concern successful the car parts assemblage reflects a broader inclination that is benefiting ample commodity exporters portion overmuch of Argentina's domestically focused manufacture is struggling.