BUENOS AIRES (Dow Jones)–The Argentine unit of Fiat SpA (FIATY, F.MI) said Tuesday that it has reinstated a shift at its car factory in Cordoba Province after resolving parts shortages and export problems.
The Brazilian government has issued the company 7,000 import licenses, Fiat Argentina said in a statement.
A spokesperson for auto workers union Smata said Monday the company planned to suspend a shift this week and idle the entire factory for one day on Friday due to excess vehicle inventories in Brazil.
Fiat Argentina attributed the suspension to a lack of parts, retooling for the production of a new car model and inventory adjustments.
Fiat’s factory is a kind of canary in the coal mine for the state of Argentina’s trade with Brazil as it exports about 85% of its vehicles to that market.
Indeed, Brazil is a key market for Argentine manufacturers, especially the automotive industry, which shipped about half of the 547,581 vehicles produced during the January-to-August period to the Portuguese-speaking nation.
The recent depreciation of the Brazilian real and a slowdown in Brazil’s industrial activity have Argentina’s policymakers and industrialists worried, especially as double-digit inflation risks pricing Argentine-manufactured goods out of key export markets.
Source: online.wsj.com