MWM prepares ground for new cycle in the country in 2012
Valor Econômico
MWM International, the American subsidiary of Navistar, will face a year of preparation for the new cycle of operation in Brazil, which starts in 2012 with the resumption of the engine assembly to third parties and launching of a new family of products that meet the Euro 5 norm. To support this business model, MWM plans to invest US$ 85 million next year, US$ 5 million more than that applied in 2010. The resources are part of a plan that foresees investments of US$ 345 million between this year and 2015, in resources generated by the own subsidiary and a smaller portion guaranteed by the National Development Bank (BNDES).
The expectation regarding the return of the investment is high. Only in one of the contracts for production of engines for a major automaker, it is expected additional revenue of US$ 2 billion over seven years. For this customer, will be delivered between 50 thousand and 60 thousand pieces annually. The other contract, a trucks automaker, foresees the assembly of 30 thousand drivers in the course of five years. "Today the challenge is to implement the new model and ensure that both suppliers and our production capacity can sustain it", said the president of MWM, José Eduardo Luzzi, who's been working for the group for 25 years and took office in September, to Valor.
In the fiscal year of 2010, ended on October 31, the company produced 143 thousand engines in the two factories operating in the country - in São Paulo (SP) and Canoas (RS) - in the best period in its history, and expects to break new record in 2011, with expansion of 9% in volume produced. The two units, in addition to the component factory in Argentina, will receive investments for capacity expansion and adaptation of the lines to meet the outsourcing contracts.
Throughout this year, the significant growth in sales of truck engines was the major responsible for the expansion of the business, a scenario that should be repeated in 2011. According to the president of MWM, the obligation of the Euro 5 from 2012 - which according to the manufacturers will increase the final price of trucks - must lead to the so-called pre-purchase of these vehicles, especially on the part of fleet companies in the last months of the next year. Wheel tractors and buses must also contribute to business expansion.