History
In Europe, Fiat S.p.A. and PSA Peugeot Citroën began a 50/50 joint venture in 1978 under the name of "Sevel" (an acronym of "Société Européenne de Véhicules Légers" or "Società Europea Veicoli Leggeri"). Two factories, Sevel Sud in Italy and Sevel Nord in France, still produce commercials and MPVs.[6][7]
The Argentine manufacturers of Peugeots (SAFRAR, Sociedad Anónima Franco Argentina de Automotores CIF) and Fiats (Fiat Concord S.A.) then merged in 1981.[1][2] The merger was in response to law No Nº 21.932 of 1979, ordering the restructuring of the Argentine automotive industry.[8] The new company formed was also called Sevel, but here the versatile acronym stood for "Sociedad Europea de Vehículos para Latinoamérica" (European Company for making Vehicles for Latin America). At first, Sevel resumed production of models previously made by Fiat Concord (125, 128) and SAFRAR (404, 504) but the company soon added new models such as Peugeot 505 (1981), and Fiat 147 (1982).[3]
Italian immigrant to Argentina and entrepreneur Franco Macri, who had been associated with Fiat in construction business, took over Sevel operations in 1982 through its Grupo SOCMA,[3] after acquiring the 85% share.[9] The company proposed to reduce production of automobiles to 30,000 per year, which caused the closure of two out of five assembly plants in Argentina, and the suspension of 15,000 employees.[4] In the second half of the 1980s, Fiats Regatta (spelled with two t's in South America except for Venezuela[10]), Uno, Duna were added, as well as the Chevrolet C-10 pickup produced under license from General Motors.[3]
As part of the rationalization effort, production of passenger vehicles was to take place in Fiat's large El Palomar plant, while commercials, tractors,[11] vans, and heavy vehicles were to be built in Fiat's factory in Ferreyra, Córdoba province. Peugeot's Berazategui (in Greater Buenos Aires) factory was decommissioned and production transferred to El Palomar, but increasing market demand in 1993 meant this plant was reopened.[3]
The opening of imports in 1991 allowed Sevel to market in Argentina Alfa Romeo and Citroën vehicles.[3] In 1992, Mauricio Macri was appointed as vice-president of the company, then being president from 1994 to 1995 before becoming a football executive as president of Boca Juniors in 1996.[5]
Sevel, the Socma Group's centerpiece at the time, initially benefitted from the boom touched off by Economy Minister Domingo Cavallo's Convertibility Plan in 1991, seeing its auto sales grow from 30,000 in 1990 to 200,000 in 1994.[12] The local auto industry was hit hard, however, by the Mexican peso crisis. A fall in sales to 130,000 led the company to divest itself of the Fiat licence in 1996, and Sevel revenues fell by nearly half, to US$1.1 billion.[12]
The Argentine economic crisis that began in 1994 affected the automotive production among other sectors. In 1996 Sevel Argentina separated from Fiat S.p.A.[9] As Fiat's Argentine operations gradually became autonomous, Sevel moved their entire production to their El Palomar plant.[13] In 1998, Grupo SOCMA sold its block of shares to PSA Group which took over production of Peugeot and Citroën vehicles under the name of "Peugeot-Citroën de Argentina".[5][9]
Sevel was eventually liquidated, rescinding its Peugeot licence in March 2000, well into the 1998–2002 Argentine great depression, and the Socma Group's global revenues fell from US$4.5 billion in 1994 to US$2 billion in 2001.[14] Following Sevel's liquidation, Macri was convicted of customs duty evasion relating to an auto export-import scheme via neighboring Uruguay.[15]
