Ford Invests $660 Million In Argentina To Build Its New Vehicle
Making the announcement from Ford (NYSE: F) plant in General Pacheco, Buenos Aires, Argentina’s Minister of Economy Sergio Massa revealed a $660 million investment from the carmaker in producing the new Ranger in Argentina. This move is expected to result in 70% of the vehicle’s production being allocated for export, bolstering the country’s international trade prospects.
“We understand that when Argentine exports are with added value, when we multiply with work, talent and value generation the volume and amount of our exports and build a development process that improves the future perspective, come to launch this project to transform those $660 million of investment into reality, in vans, fills us with enormous satisfaction,” Massa said, according to an Ambito report translated from Spanish.
He further highlighted the contributions of auto parts suppliers and Ford, emphasizing the company’s significance in automotive development projects.
“For our province and obviously for those of us who are from Tigre… we are proud of what Ford represents for Tigre and for Pacheco,” Massa added
In line with the government’s commitment to fostering production platforms for new models, a new import regime was introduced to encourage the development of incomplete vehicles within Argentina. This regime offers tariff benefits, promoting national integration and boosting exports.
Under the new regime, Extra-Zone Import Duties for completely disassembled and incomplete vehicles (IKD) will be reduced. To participate in and maintain the regime, automotive manufacturers in the country must establish annual targets for increasing local content, expanding exports, and ensuring a sustainable trade balance.
The ultimate objective is to continue propelling a sector that serves as a key driver of national industrial growth, surpassing pre-pandemic levels by 16.4%. According to the latest report from the Association of Automotive Factories (ADEFA), vehicle production in Argentina experienced a remarkable 14.8% year-on-year growth in May, reaching a decade-high production volume for the month. Additionally, production from January to May 2023 increased by 24% compared to the same period in 2022, marking the strongest start since 2014.
In terms of exports, the sector shipped 30,279 vehicle units in May alone, a notable 13.1% increase compared to the previous year. The cumulative export volume for the first five months of the year amounted to 128,753 units, reflecting a remarkable 19% growth compared to the same period in 2022, the highest export volume since January-May 2014.
In line with this, Toyota has also announced its plans to construct a new plant dedicated to producing the Hiace utility vehicle in Argentina. This investment, valued at $50 million, represents the first of its kind in 23 years and is projected to generate 200 new job opportunities. Construction has already commenced on an industrial building, with the assembly of the initial models set to commence in January 2024.
Last month, Ford announced that its electric vehicle owners will soon have access to Tesla’s massive EV charging network. The respective chief executives of the carmakers, Jim Farley and Elon Musk, both appeared on a Twitter Spaces livestream to broadcast the move, which will see Ford EV owners be able to use Ford’s mobile app to charge at Tesla’s 12,000 Supercharger stations.
“We don’t have as many EV customers as you do, but we still have plenty, and for them to be able to have this benefit early next year already and not have to buy a new car is, I think, a real statement by you and the Tesla team to be really prioritizing the customer’s experiences,” Farley said to Musk at the livestream.
The partnership makes Ford the first major carmaker to take Musk up on his November 2022 invitation to carmakers to build new EVs using the Tesla charging port, which the company says is twice as powerful as CCS connectors.
Information for this story was found via Ambito and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
