From ADEFA they pointed out that the sector as a whole has already established strict protocols in terms of safety and health to produce again
April was a historic year for the automotive industry, due to the negative: in April there was no production of vehicles.
“As is public knowledge and in compliance with the rules of Preventive and Mandatory Social Isolation as a result of the COVID19 pandemic, automotive terminals have kept their productive activity paralyzed since last March 20,” said a report by ADEFA, an entity that nuclea to the automotive companies installed in Argentina.
When considering the January-April period, this year production accumulates less than 66,000 units, which implies a collapse of 38% compared to the almost 107,000 reached by the industry in the same period of 2019.
In the case of exports, the sector sent 2,386 units mainly to markets in the region. These units correspond to remaining units produced prior to the establishment of isolation and were dispatched towards the end of April, when the quarantine was relaxed and they were enabled to activities related to foreign trade.
This implied a collapse of almost 83% compared to the previous month, and 88% below the volume that was recorded in April 2019.
In the accumulated index of the first four months, exports registered a 37% drop.
In wholesale sales, meanwhile, the automotive sector sold 7,512 units to the dealer network, a volume that was 60% below the performance of the previous month, and contracted almost 74% in comparison with April last year. This being the case, in the accumulated January-April wholesale sales contracted 35 percent.
Agencies also suffered
The sale of 0Km vehicles in April reached 4,385 units. It is the record for this month lowest in the historical series of activity due to the situation of preventive and compulsory social isolation and the closure of automotive registrations, according to data from the Association of Automotive Dealers (ACARA).
This performance biased by the health crisis reflects for April a collapse of 88% compared to 37,321 units in the same month of 2019, while the accumulated of the first quarter with 94,849 units reflects a fall of 46% year-on-year.
The entity that brings together official dealerships across the country explained that the little that was patented in April was the result of sales made before the start of the isolation since the month had no commercial movement.
Ready to re-operate
ADEFA indicated that, in the context of the pandemic, the terminals carried out concrete actions to collaborate with the national government, various provinces and organizations such as loans for fleet vehicles, manufacture of face masks, and various donations, among other initiatives.
Looking ahead, ADEFA President Gabriel López highlighted “the need to continue working with the Government in the search for measures to ensure the sustainability of companies throughout the value chain in financial, tax and labor matters ”
“From the beginning of social isolation, we began to work together with the national and provincial authorities on measures that mitigate the negative effects of the cessation of industrial and commercial activity in order to ensure conditions that make the structure of the entire value chain of this strategic sector, “López said.
In this sense, the manager stressed that “Given the export profile of production in the automotive sector, the possibility of re-producing for export is very auspicious.”
In this sense, as indicated by ADEFA, The sector as a whole has already established strict protocols in terms of safety and health to be able to produce again.
“It is very important now to establish administrative approval approval processes for agile production and in line with the complexity of the industry’s value chain so that we can return to full activity as soon as possible,” they concluded.
The agencies also expect the sector to react as soon as possible to prevent the crisis from deepening. And for this, they ask the government for help.
“We are reinforcing our proposals to achieve immediate reactivation initiatives, starting with a significant reduction in the national, provincial and municipal tax burden as an emergency measure for the next 90 days, so that the situation does not become unsustainable at the level of employment, production and sale, “said the president of Acara, Ricardo Salomé.
Otherwise, the manager warned, “the concessionaires will not be able to meet their expenses and not even 25% of the wages to be paid in April.”
In view of the crisis afflicting the sector, ACARA warned that the sector is not being able to cover “not even 25% of April salaries” and warned that the situation makes it “unsustainable” to maintain employment levels.
ACARA’s pronouncement came days after the agreement between the Government and the business chambers to reduce the wages of suspended workers by 25%.
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