Argentina Advanced Manufacturing - Industry - Market, Share and Trends 2023-2028

Summary of Advanced Manufacturing

Argentina has a relatively small but sophisticated advanced manufacturing sector centered around automotive, agricultural machinery and aerospace industries. Investments in R&D and adoption of advanced technologies like- robotics, 3D printing, IoT and AI remain low compared to other countries in the region.

The COVID-19 pandemic disrupted exports and supply chains, causing GDP to contract by over 9% in 2020 according to World Bank data. Recovery will depend on political and macroeconomic stability, as well as strengthening regional trade partnerships to diversify export markets beyond the EU and US.

The Advanced Manufacturing Industry in Argentina has been growing at a steady pace over the past few years. The industry is expected to continue growing in the coming years, driven by the increasing demand for high-tech products and services. The industry is also expected to benefit from the government’s efforts to promote economic growth and diversification.

Given all the recent appeasements and sustainable steps marching towards an adoption of ‘advanced manufacturing’ trend in Argentina has led Argentina to become a leader in Latin America’s advanced manufacturing sector given its skilled workforce and strategic location, but faces challenges from inflation, currency fluctuations and inconsistent policymaking which have deterred long term investment.

Recent Trends and Insights

The advanced manufacturing sector accounts for about 15% of Argentina’s GDP. The automotive and auto parts industry is the largest component that is followed by agricultural machinery, medical devices and aerospace. Exports of these products have driven growth in recent years. However—the COVID-19 pandemic and currency devaluation caused a recession and drop in exports since 2020.

The Argentine government has set targets to increase public and private R&D spending to 1.5% of GDP by 2030. This could drive adoption of Industry 4.0 technologies which remain low currently. Investments are constrained by political uncertainty, inflation, limited access to credit and skill gaps.

The automotive industry is the largest subsector that is accounting for over 25% of manufacturing GDP and 1 in 5 manufacturing jobs. Major automakers like- Volkswagen, Toyota, Renault and Ford operate plants in Argentina.

However—the sector has faced difficulties in recent years due to currency devaluations making exports more expensive. According to other industry insights- auto production declined over 20% in 2020. Agricultural machinery is another major export, led by global brands like John Deere and New Holland.

The medical device industry is growing at over 10% annually but relies heavily on imported components and technology transfers. The government is working to strengthen linkages between local manufacturers and research institutions to boost innovation in priority sectors through tax incentives and public-private partnerships.

Product Insights

Top products in terms of exports include vehicles, vehicle parts, harvesters and agricultural machinery, aircraft parts, and medical devices. Argentina has expertise in some niche areas like satellite and radar technology, nuclear technology, and biotechnology.

Local manufacturing capabilities exist but many global firms have downsized or exited in recent years due to the challenging business environment. Strengthening regional value chains and developing smart specialization strategies could help drive future growth.

Top exports in terms of value include passenger and commercial vehicles, vehicle parts and components, tractors, harvesters and other agricultural machinery. Argentina is also developing capabilities in more advanced aerospace and defense products. For example—the INVAP company has partnerships with global firms to produce components for satellites and radar systems.

INVAP recently partnered with Rolls-Royce to develop small modular nuclear reactors as well. The biotechnology sector shows promise, with world-class research in areas like genetically modified crops and pharmaceuticals. However— more can be done to commercialize this research and strengthen intellectual property frameworks to attract long term investment in R&D.

Multinational firms have noted Argentina’s well-educated workforce but cite high taxes, inflation and inconsistent regulations as barriers that increase costs and risks.

Key companies

Some major players within this vast domain of industry are:

• Volkswagen
• Toyota
• Renault
• Ford
• John Deere
• New Holland
• Tucuman
• Santa Fe
• INVAP
• Rolls-Royce

Country Analysis

The provinces of Buenos Aires and Cordoba are the industrial heartlands, together accounting for over 60% of manufacturing GDP. Buenos Aires is the center of the automotive industry near the capital, while Cordoba specializes more in agricultural machinery due to its agricultural hinterland.

However— other regions see opportunities as well – for example— Tucuman and Santa Fe are developing aerospace and defense clusters. The government aims to foster more balanced regional development through tax incentives for investment in less developed provinces.

Attracting FDI will be important to access new technologies, but also to retain human capital and stem the effects of “brain drain” – according to an industry study, over 20% of college-educated Argentines live abroad due to economic instability at home. Partnerships between industry and technical colleges could help reskill and upskill the domestic workforce to meet changing needs.

Workforce availability and skills are crucial for the future. Argentina scores well on technical skills but suffers from brain drain and skill gaps relating to advanced digital technologies. Investment in technical training programs and partnerships with academia will be vital.

Market segmentation

By Type:

• Additive manufacturing/3D printing
• Automation/robotics
• Industrial internet of things (IIoT) and industrial analytics
• Plant asset management (PAM)
• Manufacturing execution systems (MES)
• Industrial controls

By End user:

• Manufacturer and Retailer
• Distinct industries like automotive, aerospace, electronics
• Process industries like oil & gas, chemicals, pharmaceuticals
• Energy and utilities
• Food and beverage

By Enterprise Size:

• Large Industries
• Small & Medium Industries

Our Methodology

We have offered a well-founded review of Argentina’s advanced manufacturing market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.