Argentina’s auto parts industry feels the pain from Milei’s shock therapy

Inside a small, family-run auto parts plant on the outskirts of Buenos Aires, production lines sit quiet.

The factory is running below capacity as the firm, Suspenmec, ​struggles to compete with an influx of cheaper imported parts, many from China, after Argentina sharply eased trade restrictions.

Sales this year are down around 30% at the ‌company, which makes 600 types of suspension parts.

President Javier Milei’s aggressive economic reforms – including slashing import barriers and presiding over a stronger peso – have helped stabilize the economy. But for many small and mid-sized manufacturers long shielded from foreign competition, the adjustment has been sudden and painful.

Imports of auto parts rose 11.6% in 2025 from a year earlier to about $10.32 billion, according to industry group AFAC. Exports, mostly to neighboring Brazil, rose ​just 1.2% to roughly $1.28 billion.

The following analysis outlines the historical progression of Argentine seaborne auto part exports from January 2023 through March 2025, according to statistics compiled by Datamar:

Auto Part Exports | Argentina | Jan 2023 – Mar 2026 | TEUs

Source: DataLiner (click here to request a demo)

Imports from China, meanwhile, jumped 80.9% on a year-over-year basis to $1.46 billion, though Brazil remained the top supplier.

“It is worrying. We ​feel the impact of (duty-) free imports from so many brands,” said Lucas Panarotti, a partner at Suspenmec, as he stood beside idle machinery at ⁠the factory.

Other auto parts makers, including Sweden’s SKF and U.S.-based Dana, have shut some of their plants in Argentina.

Local manufacturers’ struggles are reflected in a decline in auto parts ​output, which fell 22.5% in the first two months of this year from the same period in 2025, according to government statistics agency INDEC, which did not specify volumes.

Vehicle production, ​which reached 490,000 units in 2025, fell 19% in the first quarter of 2026 from a year earlier.

“It is a turning point. We very quickly entered a new ecosystem, where the opening of the economy and international trade has put pressure on Argentine industrial companies,” said Nicolas Ballestrero, the CEO of Grupo Corven, which has experienced a decline in output and exports this year.

Experts say Argentina’s auto industry must ​specialize and expand exports to adapt. Andres Civetta, an economist specializing in the industrial sector at consulting firm Abeceb, estimates the country could eventually export about 400,000 light commercial vehicles ​annually, up from the roughly 280,000 shipped last year, mainly to Brazil and other Latin American markets.

DELICATE BALANCE FOR MILEI

The situation in the auto ‌parts sector ⁠reflects a broader trend that is benefiting large commodity exporters while much of Argentina’s domestically focused industry is struggling.

Although the South American country’s trade surplus climbed to $2.5 billion in March, 24,180 companies, or about 5% of the total that were open for business, closed between November 2023, just before Milei took office on a right-wing libertarian agenda, and January of this year, according to consultancy Fundar.

While INDEC data show economic activity fell 2.1% in February from a year earlier, sectors including mining, agriculture and fishing experienced rises of between 8% and ​15%. Manufacturing, however, saw a drop of 8.7% and retail ​commerce was down 7%.

Source: Reuters

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