BUENOS AIRES - The car industries in Argentina and Brazil, the engine of growth in the region's economies in the past few years, have been slammed by a sluggish economy and currency devaluation in Brazil.
Sales are expected to fall even further in coming months.
Brazil's light-vehicle sales last year slumped 28 percent to 1.19 million units, the lowest total since 1993. Argentina's sales closed the year at about 455,000 units - an increase of 6 percent over 1997, but more than 10 percent below the carmaker association's original forecast.
In January, Brazil's sales slid 19 percent from a year earlier to 75,015 units, the lowest sales for the month since 1995. Sales were little changed from December.
Argentina was hit even harder. Sales fell 20 percent from the year-ago period to 27,949 cars and trucks. Sales fell 12 percent from December.
'The market is paralyzed. Consumers don't know what is going on,' said Jose Carlos Pinheiro Neto, president of Brazil's carmaker association.
Argentina's car association said it was too early to give overall forecasts for the year because the effects of Brazil's devaluation still are being played out. About half of Argentina's production is sold at home. The remaining vehicles are exported, mainly to Brazil.
With both Brazil and Argentina on the brink of recession, automakers are laying off workers and curbing production. More than 12,000 auto workers lost their jobs in Brazil last year.
Renault SA, Fiat Auto and Ford recently announced cutbacks in Argentina. Renault furloughed 1,200 workers for at least four months as exports to Brazil nearly ground to a halt. The automaker also cut its daily production 27 percent.
Fiat said it would lay off 2,450 workers and shift some production to Brazil in a bid to cut costs, while Ford's Argentine unit has kept about 1,400 workers on suspension since September.