Brazil’s auto industry estimates sales, output growth over 10% next year
SAO PAULO: Auto industry leaders projected sales and output growth of more than 10 per cent in Brazil next year at an industry event on Monday, underscoring hopes for a rebounding market as Mercedes-Benz announced new investments in bus and truck plants.
Antonio Megale, the head of industry group Anfavea, said global automakers in Brazil would likely produce some 3 million vehicles next year, up from an estimated 2.7 million this year but well below the 3.7 million made at the market’s 2013 peak.
Vehicle sales should also pick up from 7.3 per cent growth forecast this year to double-digit growth next year, he said at the Congresso Autodata Perspectivas 2018 event in Sao Paulo, adding to hopes for a market that shrank 40 per cent in the last three years.
“We’re past the trickiest part of the crisis,” he said. “Healthy sales growth along with strong exports mean we will have better production numbers.”
Adding to enthusiasm, the Mercedes-Benz unit of Daimler announced plans to invest 2.4 billion reais ($750 million) from 2018 to 2022 in Brazilian plants making bus and truck chassis.
SURGING FARM SECTOR
Mercedes-Benz executives said in a statement that the upgrades to factories would prepare the company for a rebound in commercial vehicle sales, led by a surging farm sector and signs of recovery in mining, fuel distribution and meat processing.
The top executive for General Motors in Brazil, Argentina, Uruguay and Paraguay, Carlos Zarlenga, said at the event that his company was also planning to invest more in the region.
“We’re not done with the investment announcements and we’ll have more soon,” he told the audience.
Meanwhile, agricultural powerhouse Brazil aims to revive ties with Africa after a lull and sees a vast export market for food and manufactured goods in a continent whose population is surging, its foreign minister said.
Brazil’s presence in Africa surged during the government of former President Luiz Inacio Lula da Silva, who opened embassies in 35 of 54 African nations and led a flurry of trade and investment missions. His successor Dilma Rousseff showed little interest in foreign affairs and practically ignored Africa.
“We want to take up relations with Africa again and reaffirm its importance for Brazil,” Foreign Minister Aloysio Nunes said in an interview on Friday before he set off to visit Morocco, Ghana, Nigeria, Botswana, Ivory Coast and South Africa this week.
The African population of 1.2 billion people is expected to double by 2050, adding to a reliance on food imports. Nunes noted that the continent’s middle class is expanding, while its conflicts are diminishing and institutions are gaining strength.
Two-way trade between Brazil and Africa peaked in 2013 at $28.3 billion before plummeting to $12.4 billion last year, mainly due to the drop in prices for the oil that Brazil imports from Nigeria, Angola and Algeria.
Brazil sells cars, tractors and other manufactured goods to Africa, along with food such as beef and chicken. Trade is picking up after economic crises on both sides of the Atlantic, with chicken exports rising 27 per cent in the first eight months of this year, mostly going to South Africa, Egypt and Angola.
“The potential for trade is great. Africa is not self-sufficient and needs to import food such as poultry,” said Any Freitas, an expert on Brazilian foreign policy and visiting fellow at King’s College, London.
Nunes also highlighted demand for Brazilian planemaker Embraer’s E-Jet commercial planes and Super Tucano light attack aircraft in countries such as Nigeria, Mozambique and Kenya.