A family-owned automotive parts manufacturing facility on the outskirts of Buenos Aires has fallen silent, with production lines operating well below normal capacity.
Suspenmec, the company behind the facility, finds itself battling an overwhelming wave of low-cost imported components, particularly those arriving from China, following Argentina’s dramatic reduction of trade barriers.
The manufacturer, which produces 600 different suspension component varieties, has witnessed approximately 30% decline in sales during the current year.
The aggressive economic overhaul implemented by President Javier Milei – which included eliminating import restrictions and strengthening the peso – has brought stability to Argentina’s economy. However, smaller and medium-scale manufacturers who previously enjoyed protection from international competition now face abrupt and difficult transitions.
According to industry association AFAC, automotive parts imports increased 11.6% in 2025 compared to the previous year, reaching approximately $10.32 billion. Meanwhile, exports – primarily destined for Brazil – grew only 1.2% to roughly $1.28 billion. Chinese imports experienced a dramatic surge of 80.9% year-over-year, totaling $1.46 billion, though Brazil continues as the primary supplier.
“It is worrying. We feel the impact of (duty-) free imports from so many brands,” Lucas Panarotti, a Suspenmec partner, stated while standing near unused equipment in the facility.
International companies including Sweden’s SKF and America’s Dana have closed several Argentine manufacturing operations.
The challenges facing domestic producers are evident in declining automotive parts manufacturing, which dropped 22.5% during the first two months of this year compared to the corresponding 2025 period, based on INDEC government statistics that did not provide specific volume figures.
Automobile manufacturing, which totaled 490,000 units in 2025, decreased 19% in the first quarter of 2026 versus the same period last year.
“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,” Nicolas Ballestrero, CEO of Grupo Corven, explained. His company has experienced reduced production and export levels this year.
Industry specialists suggest Argentina’s automotive sector must focus on specialization and export expansion for adaptation. Andres Civetta, an industrial sector economist at Abeceb consulting firm, projects the nation could potentially export approximately 400,000 light commercial vehicles annually, compared to roughly 280,000 shipped last year, primarily to Brazil and other regional markets.
Argentine government officials did not provide responses to requests for commentary.
The automotive parts sector situation mirrors a wider pattern favoring large commodity exporters while Argentina’s domestically-oriented industries face difficulties.
Despite the South American nation’s trade surplus reaching $2.5 billion in March, approximately 24,180 companies – about 5% of operating businesses – ceased operations between November 2023 (shortly before Milei assumed office with his right-wing libertarian platform) and January of this year, according to Fundar consultancy.
INDEC statistics indicate economic activity fell 2.1% in February year-over-year, though sectors including mining, agriculture, and fishing saw increases ranging from 8% to 15%. Manufacturing experienced an 8.7% decline while retail commerce dropped 7%.
“With a peso that has appreciated 10% versus last December, implying 10% dollar inflation, there will be many difficulties for companies that produce and compete with imports to do so successfully,” Ricardo Delgado, an economist leading Analytica consulting firm, observed.
Delgado, who anticipates roughly 2% economic growth in Argentina during 2026, noted the primary concern involves sectors damaged by Milei’s economic approach generating more employment and tax income than others, potentially threatening the government’s valued fiscal surplus.
This represents a challenging balancing act for Milei approaching next year’s re-election campaign. Giacobbe & Associates polling shows his approval rating at 36%, declining nearly six percentage points since March.
The Torcuato Di Tella University government confidence measurement fell to 2.02 points in April, down 12% from the previous month’s figure. The measurement uses a zero to 5 scale.
Manufacturing facilities also face pressure from weakening consumer demand following Milei’s cost-cutting measures designed to control high inflation, which reduced Argentine citizens’ buying power.
The economic downturn has affected employment markets. Unemployment increased to 7.5% in the fourth quarter of 2025, up from 6.4% the previous year. The automotive parts industry alone eliminated approximately 5,000 positions in 2025, representing 10% of its workforce, according to AFAC information.
Economic analysts noted unemployment figures would be higher without displaced workers transitioning to informal employment opportunities, such as ride-sharing services.
