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Tuesday, June 25, 2013

Production of automotive parts in Brazil expected to grow by 4.5% in 2013

In line with the growth of vehicle sales and production volumes in Brazil, the country's automotive parts industry registered a growth of 5.3% in revenue between January and May of this year, according to figures from Sindipeças. On Thursday, 13, Paulo Butori, president of the association, revealed that the industry should register a 4.5% growth when compared to 2012.
Speaking about the 2nd semester of this year, the executive mentioned that the industry's most important challenge relates to the control of the segment's foreign trade deficit, which is expected to close the year at around US$ 9 billion. Butori believes that the volume of imported parts is related to what he considers the lack of competitiveness of the Brazilian industry, since "We have local idle capacity to meet the growth of a vehicle production, but the parts that are brought in from abroad are cheaper."
Butori mentioned that recent measures by the federal government such as the lower burden on company payrolls and the drop in the cost of electric energy have been beneficial. However, he complained that the automotive parts segment "is highly taxed throughout the entire chain."
Positive effects from the Inovar-Auto are not expected to occur quickly for the local automotive parts segment, believes Butori. "We need to gain volume, production scale, and soon, in order to guarantee our survival. We will keep observing whether the required increase in local production will indeed occur."
The method of tracking parts produced by small and medium-sized companies remains to be defined, said the president of Sindipeças, who defined the adoption of penalties that are proportional to the size of the companies, since "the fines imposed by the program are capable of breaking big companies, let alone small ones."
According to Butori, companies in the segment have lost the capacity to invest throughout the years, especially when compared to the vehicle manufacturers. "For every US dollar invested by the vehicle manufacturers 20 years ago, automotive parts producers would come in with US$ 1.30. Currently, we see that vehicle manufacturers plan to invest US$ 20 $5 million in the country in the next 4-5 years, while automotive parts producers plan to invest US$ 10 billion, at most."
"The automotive parts that arrive in Brazil from abroad, which are following the new vehicle manufacturers that are establishing local manufacturing facilities, arrive with more modern, robotized and higher productivity levels that will hardly be matched by the local manufacturers because they do not have the power to invest to upgrade their facilities."
Knowledge - on Thursday, 13, Sindipeças presented the Instituto Sindipeças de Educação Corporativa, the Sindipeças Corporate Education Institute, which will offer solutions to its members that should enable them to achieve a higher level of competitiveness and business sustainability.
Sindipeças has offered training courses on a regular basis for some time. However, the model that is now being applied for the training of labor can now be expanded as the result of the creation of the Institute. In all, there will be five schools focusing on innovation and sustainability, market management, business management, as well as manufacturing, supply chain and human resource management. According to the association, the model should enable the Institute to become a reference in the sector, as well as the first choice for the development of the industry's respective professionals.
The demands from each school are based on the needs of the links throughout the entire Brazilian automotive chain, helping to contribute to the formation of managers and company specialists.
The courses are offered in all regions where Sindipeças has a presence in the country, including through the distance education method.

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