Argentina Autoparts Sales To Brazil May Be Halved By Ford Deal

BRASILIA: Argentina could see its car part exports to Brazil cut in half if Ford establishes a plant in Bahia state, National Development Bank President Jose Pio Borges said this week. Borges said the decentralization of the Brazilian auto industry would reduce Argentine opportunities to supply Brazil's main auto producing industrial park in the Sao Paulo region. Pio Borges explained that under the Ford agreement, 17 parts suppliers would be located in the Northeastern region, producing parts not only for the Bahia plant but also for other car factories around the country. According to an informal agreement within Mercosur, he said, Argentina should furnish 30% of auto parts imported by Brazil. That quantity, however, was reduced to 20% following Brazil's devaluation of the real currency. Pio Borges said that if the Ford deal goes through, the percentage could be reduced further still to between 5% and 10%.

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