VW recently launched the Amarok in BA; the company's Pacheco plant can produce 30 cars per hour.

What a difference a year makes. The Argentina automotive sector was on the ropes in 2009 after a dismal year, but 2010 has been much improved thanks to continued economic strength and consumer demand across the border in Brazil.

When we last looked at automotive output six months ago, there was cause for full-year 2010 optimism: February production was up 170% compared to February 2009. Now the mid-year data released yesterday shows strength on both domestic sales and exports to Brazil; the former have recovered to 2008 levels while the latter is up 54% for January-July 2010 vs. the same seven-month period in 2009.

26noticias credits the rise in domestic sales to higher consumer confidence and more financing options. Of the 267,000 automobiles Argentina exported in the first eight months of this year, a whopping 86% went to Brazil. If domestic and international demand remains strong, Argentina is on target to produce 685,000 vehicles this year, a figure that would exceed the last production record set in 2008.

The export numbers would also tip Argentina’s trade deficit with Brazil into a surplus. One potential hurdle to breaking the record: Brazilian new auto demand is leading to a parts shortage in Argentina. The industry report says auto parts suppliers will need to ramp up production in order to bring parts supplies back into equilibrium. (Full story in Spanish)

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