It is expected a 30% drop in auto assembly

Ecuadornews:

In critical condition. That is the situation that crosses the industry of assembly of vehicles in the country, according to the representatives of the sector.

David Molina, director of the Chamber of the Automotive Industry of Ecuador, said that for this year they expect the production of assembled vehicles in the country to go from 40,000 to 28,000 units. That is, a reduction of 30%.

Molina made these statements in the framework of the inauguration of the Automotive Productive Table, which brought together manufacturers, autoparts, assemblers and related, in order to generate an agenda to boost the national industry.

The event took place in the facilities of the Metaltronic assembly company, in northern Quito, and was attended by the Minister of Production, Foreign Trade and Investment, Pablo Campana.

“We are looking at a very important crisis in the sector this year, 2019, and this obviously affects the whole auto parts chain,” said Molina.

One of the reasons for the reduction in sales and production of local cars, according to Oswaldo Landázuri, manager of Metaltronics, a company that is dedicated to the manufacture of auto parts, bicycles and other inputs, is the entry into the country of vehicles with lower costs to tariff benefits. For example from Colombia.

Campana listened to the concerns of the sector that are considering some options, such as the reduction of the Exit Currency Tax, which although it will mean a fiscal sacrifice, the decision is under analysis by the Minister of Economy and Finance, Richard Martinez

In December of last year, the Committee on Foreign Trade and Investment (Comex) approved Resolution 025, which establishes two different tariff regimes for the automotive industry, depending on whether they are current or new projects. The projects qualified as new that are approved as of January 1, 2019 will pay 0% tariff on the CKD materials (auto parts), which is a very important advance for the competitiveness of the sector, according to the Cinae.

The guild presented some proposals on this topic. Among them, that the resolution be reviewed mid-year.

The automotive sector of the country estimates that in 2019 the sales of cars will contract by 9%, according to the Association of Automotive Companies of Ecuador (Aeade). In 2018 sales grew 31% compared to 2017, reaching 137,615 units. It is a figure similar to that registered in 2011.

However, for this year, a fall in sales of 9% could be registered, that is, some 125,293 units would be sold, according to the Aeade. One of the reasons is the adjustment in the credit. (I)

Source: https://www.expreso.ec/economia/automoviles-empresas-industrias-economia-vehiculos-ecuador-YF2700357