01/12/2009 09h04

Markers invest despite the crisis

Gazeta Mercantil – 01/12/2009

The earthquake the economic crisis produces in the car industry was already expected. The makers had already signaled the damages they would suffer and the path they should take to try to change the situation - in mature markets or in markets in development. A survey made by KPMG in the last quarter of 2008 with 200 executives of the sector from all over the world shows how the fall of the markets will change the means of operation of makers and suppliers. According to the interviewed, at a global scale, margin and profitability will be strongly affected by the decrease of production. Besides technologically more efficient products, the car industry will have to resort to the merger of brands and to technological innovation to recover the confidence of both consumers and markets. One piece of the good news is that the makers tend to keep the investments to overcome the challenges. "Times are difficult. But the survey showed that many companies are willing to face the challenges, focusing on their strong points and on effective ways to manage their businesses. Executives clearly understand they cannot take their eyes off the investment in technological innovation, since this will be the way to face the crisis and adapt themselves to the new market", affirms Charles Krieck, leading partner of KPMG for the car sector. According to Krieck, the survey identified that Brazil, responsible for 60% of the South-American market, will be one of the countries that will resist the most and will have conditions to revert the crisis in the sector. "The executives of the sector consider Brazil, together with the Middle East and Africa, to be the most resistant markets", he said. In the tenth year of the KPMG survey, made between September and October of 2008, the executives interviewed represented car makers and suppliers from Canada, the United States, England, France, Germany, Sweden, India, China, South Korea, Japan, Thailand, Brazil, Mexico, Spain, Poland, Slovakia, Russia, Czech Republic, Italy, Switzerland, South Africa and Australia. The survey heard managers, officers, vice-presidents and CEOs of car makers and auto parts suppliers in the main production centers and car markets.