Herlander Zola, who runs Stellantis in South America, said the owner of Fiat and Peugeot could close one or both of its two Argentine plants, citing labor costs twice Brazil's and a market opened to imports.

"Depending on the market, the rules and the competitiveness of the products, we can move production from one to the other, keep both, close one and keep the other, or close both," Zola told Exame, a Brazilian business magazine, at a lunch with reporters in São Paulo on October 6. "Anything can happen." He put Argentine labor costs at "literally double" Brazil's. The two sites are El Palomar, in Buenos Aires province, which builds the Peugeot 208 and 2008, and Ferreyra, in Córdoba, which builds the Fiat Cronos and Titano pickup and the Ram Dakota. Clarín puts the workforce at the two sites at about 5,000.

Zola tied the pressure to imports. Peugeot's share of the Argentine market fell from about 9% last year to about 5%, he said, a drop he said "alone explains" the adjustments at El Palomar, once the brand's biggest market in the region. He blamed Chinese brands, which he said advanced "at a very great speed" after Argentina opened its market, and Brazilian-built cars, which now arrive more competitively than Argentine-made ones. Brazil accounts for 65% of the region's volume, he added, and industrial decisions are hard to make safely until the outlook there is clear.

The local team has struck a different note. Martín Zuppi, president of Stellantis Argentina, said on October 2 that the company had cut a shift at El Palomar but has production planned there for 2026 and 2027, with 35% to 40% of its output exported. He argued that Chinese vehicles entering duty-free within import quotas compete unevenly with Argentine plants that carry heavy taxes.

The industry backdrop is weak. Argentina's carmakers produced 314,975 vehicles from January to September, 16.9% fewer than a year earlier, and sales to dealers fell 24.3%, according to the manufacturers' association ADEFA, while exports rose 1.6%. The plants' troubles come amid a broader slump in Argentine manufacturing.

Stellantis plans to start production of a new engine at Ferreyra by the end of the year. Zola said a change of government in Brazil and the exchange rate could shift the competitiveness of the cars Peugeot builds in Argentina; Brazil holds its presidential run-off on October 25.