He is the CEO of the Fiat, Chrysler, Jeep, Dodge and RAM brands, a strong group in Argentina. Present and future in a paralyzed sector
The automotive sector is one of those that suffers closely from the consequences of the pandemic and from the social and compulsory isolation dictated by the National Government. Until April 26, for now, they must continue with their plants stopped and dealers without selling, with expectations that are increasingly worrying.
In addition to this reality, the crisis is not only at the local level, as happened in other times with the Argentine economy, where the parent companies could be asked for help, but the problems are global.
In this stage, iProfessional A series of interviews begins with the leaders of different sectors, who give their vision of the present, future, and the measures in general that the Government has taken.
It is the turn of Martín Zuppi, COO or General Director of FCA Automobiles Argentina SA, the company that brings together long-standing and popular brands such as Fiat, which manufactures in Córdoba, up to Chrysler, Jeep, Dodge and RAM.
Zuppi and FCA’s expectations in Argentina.
– iP: What effects in the short and medium term will this pandemic have on your company?
– MZ: The pandemic is having a full impact on the automotive industry and not only domestically or regionally, but on a global scale. Preventive measures taken by governments to prevent the collapse of health systems have led to extensive plant shutdowns, closings of commercial channels, that is, of concessionaires, etc.
In short, in the immediate term, the suspension of operations implies zero invoicing, zero exports, zero production, so the first priority, in addition to the prevention and care of our people, is to take care of the cash register to avoid major complications. This stop that we are going through obviously derives in an adjustment of all the projections with which we were facing the year, and still with a lot of uncertainty due to the lack of certainty about the end of the quarantine.
Now we project a much more limited local market than we imagined (between 300 and 250 thousand units / year), production and exports in which the weeks of inactivity will not recover since an immediate recovery and growth of the regional market is not foreseeable, particularly Brazil , and neither of the Argentine market.
The quarantine, by the way, has led to new work formats. For example, remote work or home office has become widespread, and face-to-face meetings have been replaced by video conferences.
New health care protocols are also being imposed, such as the use of masks, greater distance between staff in the lines or in the dining rooms. This emergency will surely also make virtual or online operations become more and more frequent. And the necessary care of the box also leads to a review of all the expenses and to program the progressive elimination of the unnecessary ones that are left in the budgets by inertia.
Fiat Cronos, the car made in Argentina.
In short, the pandemic will affect our billing and production particularly in this quarter, with few forecasts of an immediate exit to the levels with which we were previously working.
– iP: How do you think it will affect the branch of activity in which your company operates?
– MZ: As I mentioned in the previous question, the situation in the sector was seriously complicated. This emergency situation that we are experiencing affects the entire automotive complex, auto parts, terminals, and commercial networks that, by themselves, were passing through the necessary adaptation to a lower market than last year. Now the projections are much worse.
– iP: How do you see the actions of the Government so far and what would you recommend / ask / suggest to the officials?
-MZ: I understand that there is a general consensus on the need for life care as a first priority, and I consider that the Government has taken the appropriate preventive measures to avoid the accelerated and uncontrolled spread of the virus. But there is no manual of best practices to deal with this emergency, so it will be necessary to manage a necessary Balance between measures preventive extremes -such as generalized quarantine- and activity economic.
More developed economies have enacted measures that ensure that states assume a large part of the stoppage of all activities. Argentina’s own restrictions determine that if we do not go to a progressive easing of the quarantine, the economic and social problems will only worsen, and may also be life-threatening.
It is a very fine balance difficult to define, hence the importance that the rulers have the advice of health specialists as well as business and union leaders who represent various activities, because data is key to choose one or the other path .
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