Argentina's automakers to sell cars at subsidised rates to avoid layoffs

Buenos Aires: Argentine automakers will sell basic models at cost through state-subsidised loans in a plan to protect jobs in Latin America's third-biggest economy from the global economic slowdown, government officials said on Saturday.

Local plants of Renault SA, General Motors, Peugeot, Ford Motor Co and other automakers will participate in the government's plan to protect 150,000 auto industry jobs and to keep production from falling steeply next year.

"We have agreed with the plants that these cars will be offered without a profit margin and the dealerships will also reduce their profit margin," Industry Secretary Fernando Fraguio told a news conference on Saturday. The $890 million (Dh3,269.15 million) government auto loans programme is part of a $3.8 billion economic stimulus package announced on Thursday by President Cristina Fernandez. Each automaker will offer two of its most economic models for the plan, while the government will provide three different financing packages with interest rates much lower than market rates, to be funded by the social security system.

Argentina's vehicle output is seen at 600,000 to 610,000 units this year, up 12 per cent from last year.

Officials said some 150,000 people are employed in the sector, including auto parts and auto sales.