Argentina Autoparts Production Falls 22.5% in Q1 as Milei Opens Imports
Argentina’s autoparts industry registered a 22.5 percent year-on-year contraction in the first two months of 2026 against the same period of 2025, per the Asociación de Fábricas Argentinas de Componentes (AFAC).
The Javier Milei government’s import liberalization and reduced bureaucratic controls drove autoparts imports up 11.6 percent in 2025 to 10.319 billion U.S. dollars, with companies including Sweden’s SKF and U.S.-based Dana closing some Argentine plants.
The sector lost 4,100 direct jobs in 2025 (-7.7 percent), bringing total employment to 49,600 from 53,700, and AFAC projects another 7.5 percent vehicle-production decline for 2026.
Key Points
— Argentina autoparts production fell 22.5 percent year-on-year in January-February 2026, per AFAC.
— Vehicle production also dropped 30.1 percent in the bimester, reaching 50,630 units.
— Argentine autoparts imports grew 11.6 percent in 2025 to 10.319 billion U.S. dollars.
— SKF (Sweden) and Dana (U.S.) have closed some Argentine plants; Stellantis and General Motors have suspended workers.
— Sector lost 4,100 direct jobs in 2025 (-7.7 percent), with 80.5 percent of the decline tied to local-vehicle-production firms.
— Total automotive output reached 490,000 vehicles in 2025; 280,000 exported, mostly to Brazil.
— Universidad Di Tella government-confidence index fell 12 percent month-on-month to 2.02 of 5.
What AFAC Reported
The Asociación de Fábricas Argentinas de Componentes (AFAC) reports the sector’s Index of Industrial Production (IPI) for autoparts contracted 22.5 percent in the first bimester of 2026 against the same period in 2025. Vehicle production in the same period dropped 30.1 percent to 50,630 units, autoparts exports fell 14.7 percent, and fuel sales decreased 0.3 percent. February 2026 alone showed a 49.9 percent monthly rebound from January, suggesting a technical bounce rather than a consolidated recovery.
Argentina’s autoparts imports grew 11.6 percent in 2025 to 10.319 billion U.S. dollars, the highest level on record. The Milei government’s reduction of import tariffs and elimination of bureaucratic controls has been the principal driver, alongside cheap exchange-rate dynamics that disadvantage local producers competing with Asian and Chinese imports.
Plant Closures and Job Losses
Sweden’s SKF and U.S.-based Dana have closed some of their Argentine autoparts plants, while terminal-vehicle manufacturers Stellantis and General Motors have suspended workers. Total automotive production was 490,000 vehicles in 2025, with 280,000 exported mostly to Brazil. Q1 2026 vehicle production fell 19 percent against the same period of 2025.
Why It Matters
The Rio Times, the Latin American financial news outlet, reports that the autoparts collapse is the most visible manifestation of the trade-off in Milei’s macro stabilization programme: the trade-policy opening has stabilized the peso and tamed inflation, but small and medium industrial producers were not prepared for unfettered international competition.
Sector employment fell 7.7 percent year-on-year, with 80.5 percent of the decline concentrated in firms tied to local vehicle production. The Universidad Di Tella government-confidence index fell 12 percent month-on-month to 2.02 of a 0-to-5 scale, while Giacobbe and Asociados polling shows Milei’s popularity down nearly 6 points to 36 percent. AFAC president Juan Cantarella has called for “more realistic Mercosur rules of origin” with greater regional industrial content and an Argentine tariff policy on China aligned with U.S. and EU policy.
| Indicator | Reading | Period |
|---|---|---|
| Autoparts production | -22.5% YoY | Jan-Feb 2026 |
| Vehicle production | 50,630 units (-30.1% YoY) | Jan-Feb 2026 |
| Q1 2026 vehicle production | -19% YoY | Q1 2026 |
| Autoparts imports 2025 | USD 10.319 billion | Full year 2025 |
| Direct employment 2025 | 49,600 (-4,100, -7.7%) | vs 2024 |
| Total vehicle production | 490,000 units | Full year 2025 |
| Vehicle exports | 280,000 units | Full year 2025, mostly Brazil |
Connected Coverage
For broader Argentina coverage, see our reporting on the ARCA tax revenue contraction and Milei’s Milken speech and our analysis of the Argentina holdouts deal, both of which contextualize the broader macro framework around the autoparts crisis.
What Happens Next
- 2026 vehicle production projection: AFAC projects another 7.5 percent decline in Argentine vehicle production for the full year, against a BBVA Research forecast of 600,000 unit market sales.
- Mercosur rules of origin debate: Cantarella and Brazil’s Sindipeças president Cláudio Sahad have aligned in calling for stricter regional content rules to limit “Frankenstein” vehicles with 84 percent extra-zone components.
- Mid-term electoral overlap: Milei’s popularity has fallen nearly 6 points to 36 percent per Giacobbe; the autoparts crisis is one of the most visible signals of the trade-off in shock therapy.
Frequently Asked Questions
What is the Argentina autoparts production drop in 2026?
Argentina’s autoparts industry registered a 22.5 percent year-on-year contraction in the first two months of 2026 against the same period in 2025, per the Asociación de Fábricas Argentinas de Componentes (AFAC). Vehicle production in the same period dropped 30.1 percent to 50,630 units. February 2026 alone showed a 49.9 percent monthly rebound from January, but the underlying trajectory remains negative against 2025 base levels.
What is driving the autoparts decline?
President Javier Milei’s reduction of import tariffs and elimination of bureaucratic controls drove autoparts imports up 11.6 percent in 2025 to 10.319 billion U.S. dollars. Companies including Sweden’s SKF and U.S.-based Dana have closed some Argentine plants, while Stellantis and General Motors have suspended workers. The sector lost 4,100 direct jobs in 2025 (-7.7 percent), with 80.5 percent of the decline concentrated in firms tied to local vehicle production.
How does the autoparts crisis connect to Milei’s overall programme?
The autoparts collapse is the most visible manifestation of the trade-off in Milei’s macro stabilization: the trade-policy opening has stabilized the peso and tamed inflation, but small and medium industrial producers were not prepared for unfettered international competition. Milei’s popularity has fallen nearly 6 points to 36 percent per Giacobbe and Asociados, while the Universidad Di Tella government-confidence index fell 12 percent month-on-month to 2.02 of a 0-to-5 scale.
What does AFAC propose to address the crisis?
AFAC president Juan Cantarella has called for “more realistic Mercosur rules of origin” with greater regional industrial content, plus an Argentine tariff policy on China aligned with U.S. and EU policies. Cantarella warns that current Mercosur rules allow vehicles to be considered Mercosur-origin and tariff-free even with 84 percent extra-zone autoparts content. AFAC projects another 7.5 percent decline in Argentine vehicle production for the full year 2026.
Updated: 2026-05-05T14:00:00Z by Rio Times Editorial Desk
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