BUENOS AIRES--Production in Argentina's auto industry tumbled 24% to 461,291 vehicles during the first nine months of the year, according to data published Friday by car manufacturer association Adefa. Car sales also fell, by 26% to 561,000 vehicles, the association said.

The decline was a sharp turnaround for local units of big car manufacturers such as Ford Motor Co. (F), Renault S.A. (RNO.FR) and Volkswagen AG (VOW.XE), which enjoyed brisk sales for years. Last year, a record 955,000 vehicles were sold, partly due to cheap credit and growing inflation, which sent many Argentines hedging against price increases through durable goods such as cars.

But the Argentine government has faced a dollar crunch this year. Any hopes that Argentina might borrow dollars from abroad have also faded following a dispute with international creditors that forced the country to default in July.

As a result of the cash crunch, the government started rationing the greenback to the industry earlier this year--bad news for companies that import about two-thirds of the parts used to make cars.

Write to Ken Parks at ken.parks@wsj.com

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