Proyecto de Identidad Verbal y Visual para la "Agencia ...


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Las terminales radicadas en Argentina representaron durante el año 2004, el 28,9% de las exportaciones.
  • Proyecto de Identidad Verbal y Visual para la "Agencia ...

    1. 1. Beatriz Nofal (Ph.D), President Argentina’s Investment Development Agency Argentina, May 2008 Advantages of Investing in Argentina: Automotive and Motorcycle Industry
    2. 2. <ul><li>An Extraordinary Opportunity </li></ul>
    3. 3. Argentina offers an extraordinary investment opportunity given the combination of high and sustainable economic growth, favorable terms of trade and a competitive base of production factors. STRUCTURALLY COMPETITIVE FACTORS OF PRODUCTION KNOWLEDGE NATURE CULTURE ARGENTINA’S SUSTAINABLE ECONOMIC GROWTH Five years of steady growth at an average rate of 8.8% Twin Surpluses: fiscal and external Flexible and Competitive exchange rate Prudent monetary policy Record profitability FAVORABLE INTERNATIONAL SCENARIO Favorable terms of trade and high prices of agricultural “ commodities” and raw materials. Global Integration of Value Chains and off shoring New global consumption patterns (product differentiation) Accumulation of foreign exchange reserves and reduction of public debt Increasing demand for renewable energy sources Marked reduction of unemployment and poverty levels Rich culture Modern Industries Entrepreneurial and innovative capacities Skilled Human Resources Abundant Natural Resources
    4. 4. Over the past five years, Argentina ranked among the fastest growing economies worldwide. In 2007, the annual GDP growth rate was 8.7% and the average annual growth rate during the last five years has been 8.8%. For 2008, the estimated growth rate is in the order of 8% Average: 10.6% Average: 8.8% Average : 5.1% Average : 3.6% Average : 2.3% Source: ProsperAr based on IMF WEO database, 2007.
    5. 5. Growth is based on solid macroeconomic fundamentals that strengthen the country’s economy, making it more resilient vis-à-vis external shocks, and ruling out the possibility of a crisis in the mid-term. Macroeconomic sustainability results in higher predictability, a key factor for investment. Fiscal and Current Account Surplus (in billions of pesos) International Reserves (in billions of dollars) Source: ProsperAr based on Ministry of Economy and Production. During the first quarter of 2008, tax revenues increased at a faster rate than public expenditure and international reserves continued growing steadily.
    6. 6. Investment has grown steadily, at higher rate than GDP, leading to robust employment growth. *Estimated Source: ProsperAr based on INDEC and Ministry of Economy and Production GDP, Investment and Employment In % and Index numbers 1997=100
    7. 7. Likewise, there has been important productivity gains in the industrial sector, as the surge in production outpaces the rise in employment. + Productivity + Production + Employment + Productivity + Production - Employment = Productivity - Production - Employment Industrial Production, Employment and Productivity
    8. 8. One of the cornerstones of the current macroeconomic program is the maintenance of a flexible and competitive exchange rate. USA RER EURO RER Brazil RER Nominal ER (US dollar) Nominal and Real Exchange Rate (RER) EURO - USA – Brazil. Inverted Scale Source: ProsperAr based on INDEC
    9. 9. Argentina’s exports and imports are at record-high levels. The country has experienced a sizable and persistent trade surplus over the past eight years. Argentinean International Trade Millions of dollars Source: ProsperAr based on INDEC
    10. 10. Productive Capacities <ul><li>Rich culture and outstanding cultural productions in various fields </li></ul><ul><li>Distinguished international figures and works of art </li></ul><ul><li>Rich Urban life with a wealth of cultural possibilities </li></ul><ul><li>International destination chosen for its quality of life and tourism </li></ul><ul><li>High entrepreneurial and innovative skills (ranked 10 th in the GEM 2007) </li></ul><ul><li>Strong industrial tradition </li></ul><ul><li>Modern infrastructure and technological availability </li></ul><ul><li>World-class producers of agricultural and industrial commodities </li></ul><ul><li>Competitive private sector </li></ul><ul><li>Preferential Access to Mercosur market at 0% tariff </li></ul><ul><li>Qualified Human Resources </li></ul><ul><li>High level of education and training </li></ul><ul><li>Prestigious Universities </li></ul><ul><li>Excellent Research Centers </li></ul><ul><li>Outstanding health indicators </li></ul><ul><li>Abundance of land and natural resources </li></ul><ul><li>A wide variety of mineral and energy resources </li></ul><ul><li>Diversity of regions, topography and climate </li></ul><ul><li>High commitment with environmental protection and sustainable development </li></ul>Argentina’s economic growth is supported by an attractive and competitive resource endowment base which combines a pool of talented people, abundant natural resources, a wealth of culture and significant entrepreneurial and business skills... Nature Knowledge Culture Cesar Milstein – Nobel Prize Federico Leloir– Nobel Prize
    11. 11. <ul><li>Automotive Industry </li></ul>
    12. 12. <ul><li>AUTOMOTIVE AND AUTOPARTS </li></ul><ul><li>MAIN INDICATORS </li></ul><ul><li>Companies : 9 automotive producers (TNCs); 400 autoparts producers (mostly local producers). </li></ul><ul><li>Contribution to GDP : 2.2% </li></ul><ul><li>Contribution to Manufacturing GDP : 13.2% </li></ul><ul><li>Share in total Manufacturing Exports : 33.3% </li></ul><ul><li>Employees : 110,000 </li></ul><ul><li>Quantity of models produced: 18 </li></ul><ul><li>Inhabitants per automobile: 5.1 </li></ul><ul><li>Sales (2007) : 565,000 automobiles – Record High- </li></ul><ul><li>Exports (2007) : 316,410 automobiles – Record High- </li></ul>Source: ProsperAr based on ADEFA, 2006 Location of Automotive TNCs in Argentina The automotive industry weighs heavily and remains a growth leader in the country’s overall manufacturing production (Since 2009)
    13. 13. Domestic and external market are rapidly increasing Domestic Sales of Vehicles Thousands of units Exports and Imports of Vehicles Thousands of units Sales in the domestic market (locally produced and imported vehicles), have rebounded from the record-low levels of 2002. Sales in 2007 reached an unprecedented level of almost 565,000 units. As a result of a surging external demand, exports currently represent more than half of Argentina ´ s production. Similarly, imports account for more than 55% of domestic sales. Source: ProsperAr based on ADEFA
    14. 14. Brazil is by far the largest market for Argentina’s automotive exports. Argentina’s Exports of Vehicles, by Country Year 2007 Brazilian Automotive Industrial Indicators Source: ProsperAr based on ADEFA and ANFAVEA In 2007, automotive production in Brazil reached a record-high level of 2,870,000 units. 22.4% 12% Sales -13.3% -6% Exports 18.7% 9.5% Imports 9.9% 3.3% Production 2007 / 2006 2006 / 2005 Percent Change
    15. 15. Increasing demand in Argentina –and also in Brazil- stimulated domestic production to its record-high levels Production of Vehicles Thousand of units + 19% + 242% In 2007, automotive production expanded at a 26% annual rate, reaching a record-high level of 544,647 units. Source: ProsperAr based on ADEFA
    16. 16. Avg. Prod. : 345,500 un. Avg. Sales : 419,000 un. Avg. Exports : 40,000 un. Avg. Prod. : 349,500 un. Avg. Sales : 353,600 un. Avg. Exports : 157,700 un. Avg. Prod. : 314,300 un. Avg. Sales : 329,700 un. Avg. Exports : : 185,350 un. Avg. Prod : 874,368 un. Avg. Sales: 699,083 un. Avg. Exports : 558,949 un. Forecast of Vehicles Production, Sales & Exports Source: ADEFA Private sector estimates suggest that this growth trend will continue unabated 1.025,5 458,0 159,4 432,1 544,6 780,0 737,5 672,0 625,0 508,2 82,3 460,5 564,9 682,6 477,6 362,9 237,5 108,1 236,8 316,4 0 200 400 600 800 1.000 1.200 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (p) 2009 (p) 2010 (p) 2011 (p) 2012 (p) 2013 (p) Thousands of units Production Sales Exports
    17. 17. All automotive companies currently operating in Argentina increased their production levels to meet the ever growing local and external demand Source: ProsperAr based on ADEFA Production of Vehicles by Company Thousand of units
    18. 18. Although automobiles still represent three quarters of the vehicles sold in Argentina. Year 1996 Automobiles 86% Year 2007 Heavy Trucks 3.3% SUV & Vans 10.6% SUV & Vans 34.6% Heavy Trucks 0.9% Automobiles 64.4% Production of Vehicles by Category Auto production represented 64.4% percent of total production in the industry. Production of SUVs (Sport Utility Vehicles) and Vans accounted for 34.6% of total production, while heavy trucks and passenger vehicles explained the remaining 1%. Source: ProsperAr based on ADEFA
    19. 19. Although automobiles still are the main vehicles sold in the domestic market. Automobiles 75% Others 5% SUV & Vans 20% Automobile sales accounted for the lion-share of the domestic market sales, with 75% of total. Sales of SUVs & Vans accounted for 20% of total sales, heavy trucks, and passenger vehicles for 5%. Sales of Vehicles by Category 2007
    20. 20. The production of trucks has skyrocketed in 2007 Production of trucks In units <ul><li>IVECO was the only producer in Argentina in 2007. </li></ul><ul><li>The domestic market is mostly supplied by imports. Current imports are roughly 3.5 times domestic production. </li></ul><ul><li>Demand for trucks has increased dramatically, stimulated by the strong economic growth of the past five years and particularly by a booming agricultural activity. </li></ul><ul><li>Production has grown steadily since 2002 to meet the increasing demand </li></ul><ul><li>Imports increased faster than production. </li></ul>Imports / Production Ratio
    21. 21. Argentina offers competitive labor costs… Labor Costs by Country. Index USA base = 100 Source: ABECEB based on PriceWaterhouse & Coopers Labor Costs in Argentina Wages per hour *This figure excludes Managers Source: ProsperAr based on Ministry of Labor. US$: 3.03-3.31/hour (AR$ 9.55-10.42/hour) Office employees* US$: 2.86/hour (AR$ 9.00/hour) Trained welding personal US$: 2.73/hour (AR$ 8.59/hour) Trained assembly workers US$: 2.22/hour (AR$ 7.01/hour) Unskilled assembly workers
    22. 22. … and a set of production incentives In 2006, Argentina and Mexico eliminated all bilateral trade barriers in automobile trade and in June 2006 were eradicated hundreds of tariff items in the car parts sector. The “Flex” Mechanism <ul><li>Cash Reimbursement </li></ul>Fiscal benefits for vehicles produced domestically and that have imported parts whose value do not exceed 30% of the wholesale price of the final good (Decree 774/05). Specifically, a company manufacturing vehicles in Argentina receive a cash reimbursement equivalent to 6% of the value of the locally produced parts being purchased. Argentina and Brazil bilateral trade flows are tariff-exempt within a ”flex” mechanism, which determines the level of Brazilian imports (US$ 1.95) for every dollar of Argentine exports. Tariffs will apply when this level is exceeded. <ul><li>The “Flex” Mechanism for bilateral Trade with Brazil </li></ul><ul><li>Trade with Mexico </li></ul>
    23. 23. The largest Japanese company has settled in Argentina, 10 years ago . Source: Toyota Argentina Toyota Argentina Production in units 0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 97-'02 2003 2004 2005 2006 2007 e Since it was settled, and particularly in the past few years, Toyota Argentina has expanded operations becoming a regional supplying platform of multi-purpose vehicles. World-class Japanese companies, such as Toyota or Honda choose to produce in Argentina not only to supply the domestic market, but also to supply the region.
    24. 24. Toyota’s settlement in Argentina acted as a magnet for other Japanese companies A rising number of Japanese car parts manufacturers have settled in Argentina as a response to Toyota’s steady growth.
    25. 25. Toyota has not only increased its production scale, but it has also developed new models, enlargening the scope and reach of its local output. <ul><li>Toyota Argentina in figures </li></ul><ul><li>Production per year: 75,000 units (est. 2007) </li></ul><ul><li>Employees: 2,600 </li></ul><ul><li>Exports: 74% of the production </li></ul><ul><li>Sales all around Latin America </li></ul><ul><li>Investments for more than US$ 700 million since 1997 </li></ul>
    26. 26. Having settled in Argentina 1978, Honda is building a new automobile production plant that will start operations in 2009. The new Honda plant is intended to meet the ever-rising domestic demand. The new plant will begin exporting products to other countries in South America and will play a key role in Honda’s production strategy in South America along with the Honda auto plant in Brazil . <ul><li>New Automobile Production Plant </li></ul><ul><li>Investment: aprox. U$S 100 million </li></ul><ul><li>Start of Operation : Second half of 2009 </li></ul><ul><li>Annual Production Capacity : 30,000 units </li></ul><ul><li>Production Model : compact passenger vehicle </li></ul><ul><li>Processes: stamping, welding, painting, engine assembly and final assembly </li></ul>
    27. 27. Automotive companies are undoubtedly responding to market trends with new investments August 2007: U$S 24 to expand capacity and to increase the integration of local parts in their domestic production Previously, 76 million Euros were invested to start the production of the new Citroen C4. August 2007: U$S 161 million for the production of a new car in 2008 and a pick-up in 2010. In 2006, the completion of previous investment projects resulted in an increase in production from 300 units per day to 340 units. March 2007: U$S 41.5 millon to increase production of parts Toyota has so far invested U$S 1 billion in Argentina May 2007: U$S 100 million to expand capacity for the production of transmission gear October 2007: U$S 320.5 millon, for the production of a new pick-up. Investment Projets in Argentina
    28. 28. 2007: U$S 50 million for the production of a new commercial vehicle, the NCV3 May 2007: U$S 80 million for the production of a new vehicle, and to increase the production of the Kangoo and the Clio. July 2007: U$S 200 million for the production of a new model in the plant located in Rosario Honda is investing U$S 100 million in a new plant in Campana to start production in 2009. Two-thirds of the 30,000 units that are expected to be produced in this plant will be exported to Brazil After an agreement between Fiat and Tata Motors, the Fiat plant in Ferreyra, Cordoba, is expected to start the production of a pick-up. In 2008, U$S 60 million will be invested for the production of 50,000 annual units of the Siena model.
    29. 29. <ul><li>Autoparts Industry </li></ul>
    30. 30. Source: AFAC.* Estimated Employment for FY2008 Main Location of the Autoparts companies in Argentina Santa Fe Buenos Aires City Buenos Aires Cordoba <ul><li>AUTOPARTS MAIN INDICATORS </li></ul><ul><li>Companies : 400 </li></ul><ul><li>Direct employment : 63,100 * </li></ul><ul><li>Share of industrial employment : 3.8% </li></ul><ul><li>Sales (2007) : U$S 5,450 M </li></ul><ul><li>Exports (2007) : U$S 2,267 M </li></ul>Autoparts main indicators:
    31. 31. Autoparts sales have grown significantly, following trends in the auto production. Autoparts Domestic Sales In million of U$S Source: AFAC
    32. 32. Autoparts exports have also risen significantly since 2002... 12% compounded annual growth rate (1992-2007) 90,2% Autoparts Exports In million of U$S Source: AFAC.
    33. 33. AUTOPARTS EXPORTS, IMPORTS & OVERALL TRADE BALANCE … and imports are escalating, reaching unprecedented levels Source: AFAC based on INDEC -686 -774 -811 -1.397 -1.904 -1.176 -72 -561 -1.298 -1.914 -2.856 -4.120 -1.738 -1.837 -2.880 -2.926 4.007 2.267 1.942 253 773 1.118 1.081 1.367 1.144 1.763 1.537 6.388 4.798 939 2.170 3.999 3.204 2.834 3.676 1.216 -6.000 -4.000 -2.000 0 2.000 4.000 6.000 8.000 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Balance Exports Imports Millions of U$S
    34. 34. Investment in the sector has shown a significant positive trend. Investments were made by companies of all sizes Autoparts companies are investing to improve their productivity levels, to enlarge their production capacity and to develop new products Investment of Autoparts companies In millions of US$ Source: AFAC. *Estimated
    35. 35. <ul><li>Motorcycle Industry </li></ul>
    36. 36. Location of the Motorcycles companies in Argentina Santa Fe Buenos Aires Cordoba The Motorcycle industry in Argentina is formed by both world-class foreign companies and domestic firms. Catamarca San Juan San Luis The most important motorcycle producers are located in the province of Buenos Aires. Other companies are located in the provinces of Córdoba, Santa Fe, San Luis, San Juan and Catamarca. Demand remains higher in the provinces than in the City of Buenos Aires.
    37. 37. The domestic market for motorcycles has boomed over the past four years. Motorcycles Domestic Sales Thousand of units + 42.5% + 5261% Source: ProsperAr based on ABECEB + 106.2% Demand for motorcycles increased as a result of the strong economic growth of the last 5 years, the recovery of income, employment, consumption and the widening gap between prices of automobiles and motorcycles.
    38. 38. Production increased significantly to keep up with rising demand. Production and Assembly of Motorcycles Thousand of units Source: ProsperAr based on ABECEB + 2997%
    39. 39. Although, imports grew even faster than production. Imports of Motorcycles Thousand of units Source: ProsperAr based on ABECEB + 6090% China, 93% Brazil, 6% Others, 1% Imports by Destiny Imports come mostly from China and are concentrated on small motorcycles
    40. 40. Conclusions: A Booming Automotive and Motorcycle Industry. The autoparts industry is booming as the demand from automakers escalate and as automakers continue to increase their outsourcing activities. New industry patterns emerged as a result of the opening of new markets, the focus on regional cooperation, and the country’s competitive exchange rate. Large inflows of foreign direct investments (FDI) expanded production capacities and brought technological know-how for process improvements. Rapidly growing exports and domestic sales at record-high levels are stimulating production, which almost doubled since 2002 in the automotive industry and triple in the motorcycle industry . As a result, the automotive industry explained more than 30% of the growth in the country’s industrial production over the past three years. In 2007, the production of cars exceeded by 19% the peak of 1998.
    41. 41. Muchas Gracias Thank you To learn more about how to invest in Argentina, contact ProsperAr: Florida 375, 8th Floor Suite B (C1005AAG) Buenos Aires, Argentina Tel: (+5411) 4328-9510 email: