Argentina tries gov’t car loan plan

Argentina tries gov’t car loan plan

Consumers to get low interest car loans as carmakers agree to produce low-cost models.

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. more

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