Suzuki plans drive into Argentina

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BUENOS AIRES -- Argentine automaker Sevel Argentina SA is in negotiations with Japan's Suzuki to market and possibly build its vehicles under license here.

Sevel already builds France's Peugeot cars under license and markets Citroen vehicles in Argentina. And until midyear, Sevel also built and marketed Fiat automobiles here, but Italy's biggest automaker ended the licensing agreement and is now investing $600m to establish its own manufacturing operations in Argentina.

Sevel's efforts to secure a new license may have mixed results, however. A recent study by an automobile trade group found that Sevel and Ciadea SA, which makes Renault cars here under license, will eventually lose market share to foreign automakers such as Fiat, Ford, General Motors and Volkswagen as they invest billions of dollars to establish wholly-owned subsidiaries in Argentina.

Signs of the shift have already become visible. Last year Sevel held a 41.3% market share, while Ciadea had 23.6%. But in the first half of 1996, Sevel's share dropped to 25.7%, and Ciadea slipped to 22.6%.

Copyright October 1996, Crain Communications Inc.

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