Automaker Fiat stopped auto production in Argentina this week due the lack of parts from Brazil, according to media reports.
The parts bought in Brazil were waiting at the Brazilian border and couldn’t go through to Argentina, as no authorization was sent from the Argentinian side during the transition of government from Cristina Kirchner to recently elected right wing candidate, Mauricio Macri.
Fiat said it was using the parts it had at its inventories in Argentina to continue producing cars, but added it couldn’t determine how long it could sustain car output in such a situation.
Most Argentinian automakers rely on Brazil for parts to produce their cars, and the lack of parts could affect Argentinian exports to the neighboring country.
Elected president Macri promised to simplify paperwork for imports, following recommendations from the World Trade Organization (WTO).
Despite the lack of parts from Brazil to produce cars in Argentina this week, Fiat announced recently it will invest $650 million at its Ferreyra plant to produce a new model. Media reports suggested Aegea, which is produced in Turkey, is the model that is likely to be produced at the Ferreyra plant.