Record investment after historical sales
O Estado de S. Paulo
Only this year, the Brazilian car industry will invest US$ 4.4 billion, the equivalent to nearly 40% of everything that has been announced by the makers and manufacturers of autoparts for the period from 2010 to 2015. The investment, an annual record, exceeds in nearly US$ 1 billion all the money spent by the companies of the segment last year, when the country registered the best year of history, with more than 3.1 million new vehicles sold. "The cash will be applied primarily in new products, engineering and development and in the productive capacity", says the President of the National Association of Vehicle Manufacturers (Anfavea), Jackson Schneider.
The productive capacity of the makers, currently at 4 million vehicles a year, will be increased, but the Anfavea has not estimated the official figures yet. Consultants project an extra capacity of at least 1 million vehicles. According to Schneider, the increase of the capacity does not necessarily mean new plants because most companies have areas available. Meanwhile, two makers have announced new plants. The Japanese Toyota is building up a plant in Sorocaba and the Korean Hyundai, in Piracicaba, both in the interior of São Paulo, with their start-up scheduled for 2012.
In the past months, makers and autopart makers announced investments of nearly R$ 20 billion (US$ 11.1 billion) for the next five years. Part of the cash will come from loans made by the National Development Bank (BNDES) and part will come from the cash of the very companies installed in the Country, some of them exempted from sending profits to their headquarters. Since it showed capacity to grow amid the international crisis, when most other world markets saw their car sales abruptly fall down, Brazil was given the green light of the headquarters to increase businesses in the country. Last year, the domestic sales of cars, light commercial vehicles, trucks and buses increased 11.4% in relation to 2008. For this year, it is projected new growth of 9.3%, even though in the first quarter figures are nearly 18% better than at the same period of last year.
Schneider's forecast is of deceleration of the growth ahead, in part because of the end of the grant offered since December 2008 by means of the reduction of IPI (Excise Tax) for cars with up to 2.0 liter engines. Still, the projection of the Anfavea is closing 2010 with a new record of 3.4 million vehicles sold in the country. With sales on the rise, Brazil can consolidate as the fourth largest world market for vehicles, a position it already achieved in the first quarter of this year. With 788 thousand vehicles sold, the country passed Germany (729 thousand units) and Italy (726 thousand). In the first two months Italy stayed in the position, with 10 thousand units ahead of the Brazilian market. The first three in the ranking are China, the USA and Japan.