Toyota endorses São Paulos resumption as an automotive pole
Valor Econômico - 07/16/2008
One decade after the last investment wave of the automotive industry, which joined the fiscal war sponsored by state governments and helped Brazil decentralize the industrial production, a new cycle of projects of the sector is once again giving preference to São Paulo. Yesterday, the resumption of investments in the State officially gained Toyota's adhesion, which announced that its second plant in the country will be in Sorocaba, 100 km from the state's capital. From parts suppliers to transportation companies, which suffer to meet a production model that only works if there are no flaws, everyone breathed relieved. When they decided to build new plants in Brazil, in the middle of the 1990s, all equipment manufacturers - both those which were in the country since the 1950s and the new brands, as French ones - did not resist the fiscal incentives' appeals, which were generously offered all over the country. Now, with smaller budgets, the state governments lost force to offer incentives in the new investment wave to meet the domestic market's increase in demand. Without the fiscal war, São Paulo's natural attributes appeared; the State concentrates most car buyers, most parts manufacturers, and most skilled labor. Yet, the State of São Paulo had to defeat the state of Bahia's appetite for new plants. Today, the government of the state of São Paulo offers an advantage that greatly interests automakers: the possibility of using the ICMS credits in the exportation for investments in the State. But the logistics issue plays a great role. With plants in the interior of São Paulo, in the ABC Region and in the state of Minas Gerais, the direction of TRW, one of the automakers' main suppliers, says that it can supply the main vehicle production poles. The companies of transportation of parts reinforce the logistics issue. The transportation company, Grande ABC, one of Toyota's service providers, points mainly to the advantages of the interior of the state. And it considers that the operations in Campinas region, Sorocaba, Vinhedo, and Americana are the most profitable ones of the State, due to the fact that they do not have to cross the capital's traffic. In Ceva Logística the opinion is the same. The company's director of operations Ricardo Melchior estimates a productivity loss of its trucks around 15% in driving through São Paulo. Besides, the executive believes that the international airport of Viracopos and intermediate roads, such as Acúcar and Dom Pedro, are fundamental in the choice of a new production sites.