EFEMontevideo

Chinese car manufacturer Chery has told Uruguay's government it will permanently close its Uruguayan assembly plant, already off-line since September last year.

The decision, which means laying off close to 150 workers still employed at the Canelones plant, is a consequence of the economic situation in Brazil and Argentina, Uruguay's National Director of Labor Juan Castillo told Efe on Tuesday.

At its peak, the company's joint venture with Socma employed 300 people.

Castillo said the number of people affected by the company's closure could reach 1,000, if those benefitting from outside employment linked to the factory's operation are included.

Chery's owners attributed the decision mainly to economic crises in Brazil and Argentina and a fall in the number of vehicles being exported to Venezuela, the minister told Efe.

A report published in Uruguay in April revealed falling demand for car parts from Brazil and Argentina owing to economic conditions there.

Exchange restrictions and import clearance delays in Argentina also contributed, Castillo said, but added there was no suggestion the company is planning to dismantle the unit and relocate its manufacturing activity elsewhere.