During the first quarter of 2024, the auto parts sector presented a drop in your activity level of -3.4% compared to the same period in 2023. This is indicated by the Association of Argentine Component Factories (AFAC)in a recent report, which computes data for the first four months of the year, provided by a huge chain of companies that produce auto parts of all kinds throughout the country.
However, compared to what had happened in the first three months of 2024, a slight recovery can be seen, since at the end of March, the decrease compared to the first quarter of 2023 was negative 4.2%.
When comparing April 2024 with the same month of 2023, you can verify a -0.9% reduction of activity, which also represents an improvement, despite being negative numbers, since March 2024 had been -12.7% than March 2023. On the other hand, in the reference of the previous month, April fell by 5, 3%.
According to AFAC, all items linked to the automotive industry and related activity, presented drops in their level of activity similar to that of auto parts, thus continuing the trend that has been occurring for several months now, even for the manufacturing industry as a whole.
Just as it happened in the automotive industry, in the auto parts industry there were also exports that showed positive numbers in April, and the first projections for May seem to maintain the same status. In the fourth month of the year they recorded a increase of 2.8% in the year-on-year comparison of the January-April 2024 period. And if the comparison is in reference to March, foreign trade in auto parts was also better, with an increase of 1.6%.
“Terminal activity continues without recovering, that is, we maintain the drop levels compared to 2023. Stabilizing, but at a very low level. The same thing happens with the replacement market, with drops that are in the order of 25 to 30% in the accumulated of the year,” he said. Juan CantarellaGeneral Manager of AFAC Infobae.
However, the sector anxiously awaits the implementation of some of the measures announced by the Minister of Economy, Luis Caputoat the end of April, and that should have a positive impact on auto parts activity as they are solutions that maintain, as in the case of automotive factories, reasonable competitiveness for the export market.
“Those announcements were very well received. We are still at waiting for implementationsince there are still measures that are in process, they are not effective, but when they are put into effect, there will be three measures that will improve competitiveness in general, both in the domestic market versus imports, as in the exports of the sector,” said Cantarella, in reference to the modification of tariffs for temporary imports, incremental exports and lower taxes for molds and matrices. In general, it is expected that the digitalization processes necessary to implement these measures will be ready for end of next July.
The announcements to modify the percentage currently received through the COUNTRY tax If the Bases Law is approved in Congress, it would be a great contribution for those who import inputs to produce locally, as is the case of the auto parts industry.
“We have expectations in some lowering of the tax burdenespecially the PAIS tax for capital goods, because there are investment decisions that could be postponed due to the expectation that this tax will fall in the future. The issue is that those who have investments in their portfolio, those who can wait, are going to do so. and that ends delaying those investments that we need so much. We are very concerned about the issue of times and deadlines, in order to advance in a agenda that improves competitiveness, both for the domestic market and for exports, which would allow us to leverage activity a little at low levels as they are and which do not seem to improve in the short term. We need to improve exports and for that to cushion the decline in the domestic market,” he concluded.
