In an effort to reduce the domestic economic impact of the pandemic, the Argentinian government has published an order that makes all industry with annual revenue above US$ 41 Million to produce at full capacity. If not, they will be fined.
Source: Automotive Business Read The Article
PSR Analysis: As the Argentinian government sees a shortage of industrial products and related price escalation, it identifies reduced OEM production as the main cause of these shortages. However, it underestimates the effects of supply chain constraints and even labor constraints caused by the pandemic.
We do not believe the decree will result in higher production, and we believe the order will be reviewed in a short time. Meanwhile, this is an issue companies will have to deal with, including the over planning it should result. PSR
Fabio Ferraresi is Director-Business Development, South America, for Power Systems Research
