BUENOS AIRES, Argentina (AP) — Argentina's auto industry will get a 3.1 billion peso ($900 million) boost with cut-rate loans for first-time new car buyers, the government said Saturday.
Production Minister Deborah Giorgi's announcement detailed a key part of a broader economic stimulus package based largely on assets of the recently nationalized pension system.
Giorgi told a news conference that six automakers will each offer two models selling for $10,000 or less for people buying a new car for the first time.
The companies, most of which saw sales drop sharply in November, will have to promise to shun layoffs and hold down profit margins on cars sold under the program.
Buyers can choose a pre-savings plan under which delivery times are determined by lottery or they can contract low-interest financing. Payments are supposed to range around $230 a month.
Argentina's auto industry employs about 150,000 people and exports about $8 billion a year, but the country's automakers association reported that local auto production dropped 28 percent in November from the same month in 2007, with exports down about 25 percent.
The government announced on Thursday that it would invest about $3.9 billion, most of it from state-run banks and pension funds, to grant low-cost loans to farmers, industry and automakers to confront the global credit squeeze.
The government said the program affects vehicles sold by local branches of France's Renault SA and PSA Peugeot Citroen, Ford Motor Co. and General Motors Corp. of the U.S., Fiat Group SpA of Italy and Germany's Volkswagen SA.
