THE AUTOMOTIVE AND CONSTRUCTION

EQUIPMENT INDUSTRY Brazil

S w e d ish Tra d e C o u n cil B ra zil

2006
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
n Brazilian Construction Equipment Industry
n
n Recommendations
n
n References
n

2
 A U T O M O T IV E IS O N E O F T H E L A R G E S T
M A N U FA C T U R IN G IN D U S T R IE S IN B R A Z IL

5 largest manufacturing •The total turnover of the Brazilian

industries in Brazil USD manufacturing industry is approx. USD
billion in 2005 489 billion

•The manufacture industry employs

approximately 6.1 million people.
Food 78.7 •Automotive and auto parts has
Chemistry 69.5
approx. 107 and 195 thousand
of employees respective.
Electrical and Electronics 39.7 •
Automotive 28.9 •Automotive industry has a strong
presence in the market.
Siderurgy 20.6
•
•The average wage for an industrial
worker in Brazil is approx. USD 500
dollars/per month.

The automotive industry amounts to 6 % of the total manufacturing industry

3
Source: IBGE - Brazilian Institute of
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
q Passenger Cars
q
q Commercial Vehicles
q
q Suppliers
q
n Brazilian Construction Equipment Industry
q
n Recommendations
n
n References
n

4
INFORMATION AND STATISTICS ARE MANY
TIMES NOT AVAILABLE IN BRAZIL

q Organizations and companies are not legally

obliged to disclose information to the Brazilian
market.
q Statistics and databases are often not available or
organized as in other countries.
q There is little transparency of statistics on the
market.
q The trend is moving towards greater transparency.
q After establishing a personal relation with a
foreign company, a Brazilian company opens
up. 5
q
 THE TURNOVER Of THE CAR AND COMMERCIAL
VEHICLE SECTOR TOTALS USD 28.9 BILLION
- the industry grew 26% over the last 3 years

Production car and commercial vehicle industry in Brazil

USD Billion
35.0 Domestic Export

28.0
7.0
21.0 Information


about
14.0
turnover per
7.0
21.9 type of
vehicle is not
0.0
2000 2001 2002 2003 2004 2005 available
year

Exports has increased significantly over

the last 3 years 6
Source:
 2.5 million vehicles are produced in Brazil

V E H IC L E M A N U FA C T U R E R S

Commercial Vehicle ( 518 , 806 vehicles )

PASSENGER CARS
(2,009,494 vehicles )
Light BUSSES
TRUCKS n9 manufacturers
Commercial (35,266 vehicles )
(117,892 vehicles ) qVW
(365,648 vehicles ) ØAud
n9 m a n u fa ctu re rs n10 Manufacturers n6 manufacturers i,
S
qDaimlerChry qAgrale qAgrale e
sler qBramont qDaimlerC
a
t
ØD qDaimler hrysle qGM
o Chrysle r qFiat
d
g r ØM ØAlf
e ØM e a
, e r R
r c o
J c e m
e e d e
e d e u
p e s qFord
s - ØKar
qFiat B m
-
qFord e a
B n n
ØL z
a e n-
n n qIveco G
d z h
qScania i
qVW a 7
R qFiat qHonda
Source: Automotive o qVolvo
 A MAJORITY OF THE AUTOMOTIVE COMPANIES MAKE
THEIR PURCHASE DECISIONS LOCALLY 1 ( 2 )

Vehicles manufactured in
Brazil
Manufacturer Employees Business Purchase decisions
Honda 1284 Cars Does not disclose information
Karmann-Ghia 542 Cars Mainly local
Toyota 2124 Cars HQ, Japan
Agrale 1164 Commercial Mainly locally
International 26 Commercial HQ, USA
Iveco 650 Commercial Mainly locally, sometimes approved by HQ in
Italy
Mitsubishi 1135 Commercial Locally
Nissan * Commercial Does not disclose information
Scania 2258 Commercial HQ in Sweden or Lower orders locally
Volvo 1811 Commercial Does not disclose information

8
Source: STC *Working posts included in Renault's total
 A MAJORITY OF THE AUTOMOTIVE COMPANIES MAKE
THEIR PURCHASE DECISIONS LOCALLY 2 ( 2 )

Vehicles manufactured in
Brazil
Manufactur Employee Business Purchase decisions
er s
DaimlerChrysle 13014 Commercial and Mainly locally approved by HQ in Germany
rFiat 8187 Cars
Commercial and Locally
Cars
Ford 9156 Commercial and Worldwide agreements and regional decisions
Cars
General Motors 19193 Commercial and HQ in Sao Bernardo dos Campos or by
Cars worldwide agreements.
Peugeot 2145 Commercial and Does not disclose information
Citroën Cars
Renault 2676 Commercial and Does not disclose information
Cars
VW 24582 Commercial and Worldwide agreements and regional decisions
Cars

9
Source: STC
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
q Passenger Cars
q
q Commercial Vehicles
q
q Suppliers
q
n Brazilian Construction Equipment Industry
q
n Recommendations
n
n References
n

10
 THE CAR PRODUCTION IS GROWING IN BRAZIL

n
CarPoductinBzl n Devlopmntihas5yr
nSince 2003, the car production has
increased more than 33%
qA stable economy over the
past 5 years, with lower
2500
,
Thousand interest rates and easier
units
financing has increased the
demand for cars.
2000
,
3 3 .4% 2009
,

17
, 56 qThe VAT on a car is based on
1501
, 152
, 0 1505
, the engine volume and hence
1500
,
the segment of cars in the 1
liter range is the greatest.
1000
, qSales of Flex Fuel versions
represent more than 75% of
500 the total.
qCar export has increased year
0
on year 19 % over the last
01 02 03 04 05 5 years.
qPeugeot/Citroën have started
Year local production and Ford
has opened a factory in the
state of Bahia
11
Source: Anfavea
 SOUTH AND SOUTHEAST REGIONS ARE THE MAIN
AUTOMOTIVE INDUSTRIAL CENTER OF PASSENGER CARS

Map of Brazil

SAO BERNARDO DO CAMPO, SAO PAULO

CAMAÇARÍ, BAHIA
SAO CAETANO DO SUL, SAO PAULO
SAO JOSÉ DOS CAMPOS, SAO PAULO
GRAVATAI, RIO GRANDE DO SUL
BETIM, MINAS GERAIS
N o rth
N o rtheas
t SUMARÉ, SAO PAULO
C e ntral
S o utheasE
JUIZ DE FOR A, MINAS GERAIS
ta
S o uth s
t
INDAIATUBA, SAO PAULO PORTO REAL, RIO DE JANEIRO
SAO BERNARDO DOS CAMPOS, SAO PAULO

TAUBATÉ, SAO PAULO

SÃO JOSÉ DOS PINHAIS, PARANÁ
COTIA, SAO PAULO

DUQUE DE CAXIAS, RIO DE JANEIRO SÃO JOSÉ DOS PINHAIS, PARANÁ 12

Source: Automotive
 T H E B R A Z IL IA N C A R A S S E M B LY P L A N T S

Manufacturer Plant Production Volume

DaimlerChrysler Juiz de Fora, MG 3400
Fiat Betim, MG 503105
Ford São Bernardo do Campo, SP 150000
Camaçari, BA 250000
General Motors/ São Caetano do Sul, SP N/A*
Chevorelt São Jose dos Campos, SP N/A*
Gravataí, RS 120
Passenger Cars

GM Total 475000
Honda Sumará, SP 65000
PSA PegeotCitroën Porto Real, RJ 93500
Renault São Jose dos Pinhais, PR 75306
Toyota Indaiatuba, SP 57000
Volkswagen São Bernardo do Campo, SP N/A*
Taubaté, SP N/A*
São José dos Pinhais, PR N/A*
VWTotal 725888

* The company provides only the total production

vo lu m e

13
Source: STC
 FLEXFUEL ENGINES AND SMALL CARS ARE THE MOST
IMPORTANT TRENDS IN THE BRAZILIAN CAR INDUSTRY

Trends in the Brazilian car industry

q

nFlex Fuel is the trend

qFlexfuel engine production has surpassed that of both
Alternative
Alternative Fuel
Fuel gasoline and ethanol
qThe market has discovered the advantages of mixing gas

q
& ethanol to achieve an efficient cost benefit
nIncreased
competition and continued price reductions within the
small car segment
qThe segment “small cars” has experienced greatest growth
mpetition and
ompetition and price
price red uctions
reductions qThe margins on domestic produced vehicles has dropped
qBrazilian cars manufacturers remain competitive. A
majority of the exports are made to emerging markets
q

nThe Brazilian cars have been exported mainly to emergent

Exports
Exports countries
qSmall cars (1.0L) have considerable market in those
countries due to the lower prices
14
Source: STC
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
q Passenger Cars
q
q Commercial Vehicles
q
q Suppliers
q
n Brazilian Construction Equipment Industry
q
n Recommendations
n
n References
n

15
 THE COMMERCIAL VEHICLE PRODUCTION IS A
HUGE MARKET AND HAS INCREASED OVER THE
LAST YEARS n
ComercialVhPdutnBz n Devlopmnthas5yr
n
nSince 2003, the commercial vehicle
production has increased more than
60%
Thousand
560
units qBus and truck production
480
.8 % reached an all time high in
60 2005
400
qAfter a significant
320
production decrease during
240
2001 and 2002, the
160 commercial vehicle
80
production has recovered.
qArgentina and Mexico are the
0
01 02 03 04 05 main destinations of
LIGHT COMMERCIALS TRUCKS BUSES
Brazilian commercial
Year vehicle exports
qBrazil has the second
biggest bus production in
the world

Growth mainly a result of exports 16

Source: Anfavea
 COMMERCIAL VEHICLES PLANTS ARE SPREAD OVER THE
COUNTRY

Automotive Industry map – commercial vehicles by State

Map of Brazil
CATOLÉ HORIZONTE, CEARÁ

SETE LAGOAS, MINAS GERAIS

MANAUS, AMAZONAS CATALAO, GOIÁS

RESENDE, RIO DE JANEIRO
N o rth
N o rtheas
t SÃO JOSÉ DOS PINHAIS, PARANÁ
C e ntral SAO BERNARDO DO CAMPO, SAO PAULO
S o utheasE
ta
S o uth s
t
CURITIBA, PARANÁ

SAO BERNARDO DO CAMPO, SAO PAULO

SAO BERNARDO DO CAMPO, SAO PAULO

PORTO REAL, RIO DE JANEIRO

CAXIAS DO SUL, RIO GRANDE DO SUL

SÃO JOSÉ DOS PINHAIS, PARANÁ 17
Source: Automotive
 T H E B R A Z IL IA N C O M M E R C IA L V E H IC L E S
A S S EMManufaBcture
LYr P L A Pla
NntT S Production Volume
Agrale Caxias do Sul, RS 5191
Bramont Manaus, AM N/A
Commercial vehicles

DaimlerChrysler São Bernardo dos Campos, SP 53072

Fiat Betim, MG 79442
Ford São Bernardo dos Campos, SP 144987
General Motors São Jose dos Campos, SP 89808
International Caxias do Sul, RS 1016
Iveco Sete Lagoas, MG 4631
Land Rover São Bernardo dos Campos, SP 591
Mitsubishi Catalão, GO 21353
Nissan São José dos Pinhais, PR 10306
PSA PeugeotCitroën Porto Real, RJ 5290
Renault São Jose dos Pinhais, Paraná 3776
Scania São Bernardo dos Campos, SP 14371
Troller Catolé Horizonte, CE 1300
VW São Bernardo dos Campos, SP 74050
Volvo Curitiba, PR 12122

18
Source: STC
 BRAZIL IS ONE OF THE BIGGEST EXPORTS OF
COMMERCIAL VEHICLE IN THE WORLD

Trends qwithin the Brazilian commercial

vehicle industry
nCommercial vehicles production increases in all segments: light
commercial vehicles, buses and trucks
qExport volumes of commercial vehicles is booming
Market
Market qVW and DaimlerChrysler are the biggest players in the
truck and bus production respectively
q
q

nIncreased competition and continued prices reductions

qThe profit margin for domestic produced vehicles is
mpetition and
ompetition and price
price red uctions
reductions declining
qBrazilian commercial vehicles remain competitive
q
q

nThe demand for commercial vehicle is on the rise due to:

qA stable economy and inflation under control
Demand
Deman d Growth
Growth
qLower interest rates and hence cheaper financing of
vehicles

q
19
Source: STC
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
q Passenger Cars
q
q Commercial Vehicles
q
q Suppliers
q
n Brazilian Construction Equipment Industry
q
n Recommendations
n
n References
n

20
THERE ARE ABOUT 500 AUTOMOTIVE
SUPPLIERS IN BRAZIL
n
Brazilnutomvesp
n


n There are around 500 suppliers

(Systems suppliers, T1 and T2)
installed in Brazil
n
n The 10 largest are foreign
subsidiaries
n
n There is a very high concentration
of automotive suppliers in the
south and southeast of Brazil
n
n Many companies are small with
few employees and are usually
family owned
n
n Traditionally strong segments are 21
companies that supply chassis,
 MANY OF THE MAJOR T1 INTERNATIONAL
PLAYERS ARE PRESENT IN BRAZIL 1(2)
THE MAIN T1 / SYSTEM SUPPLIERS

Transmis
Chassis Engine Steering sion

qDana Albarus qCummins qDHB qEaton

qDelphi ( Ss) Brasil Componente qZF do
qMagnetti qMagnetti s Auto Brasil
Marelli Marelli motivos qDana
qThyssenkrupp (Ss) qTRW
qArvinMerito
qMVW Automotive r
qArvinMeritor
Internacio qVisteon
qAAM American q
nal qZF Sistemas
Axle Industria q
Manufacturi de Direção
de Motores (Ss)
ng qTritec
qBenteler
qSuspensys
q

Ss - System
Supplier
22
Source: SINDIPEÇAS
 MANY OF THE MAJOR T1 INTERNATIONAL
PLAYERS ARE PRESENT IN BRAZIL 2(2)
THE MAIN T1 / SYSTEM SUPPLIERS

Tires Glass Heating Panel

qGoodyear qBenteler qBehr Brasil qMagnetti

qPirelli Componentes qValeo Marelli (Ss)
qMichellin Automotivos qDenso do qSiemens VDO
( Ss) Brasil qValeo
qBridgestone
qPilkington
Firestone q qLear
Brasil
qRinaldi q
qVisteon
qTortuga
Câmaras de
Ar
qPneus Levorir

23
Source: SINDIPEÇAS
 MANY OF THE MAJOR T2 INTERNATIONAL
PLAYERS ARE PRESENT IN BRAZIL 1(2)
THE MAIN T2 SUPPLIERS

Transmis
Chassis Engine Steering sion

qAllevard Molas qAffina qKostal qSKF

qAssociated Automotiva Eletromeca qTimkem do
Spring qCeramica e nica Brasil
qBorlen S/A Velas de qTakata qINA / FAG
qGKN do Brasil Ignição Petri qEaton
NGK do qDelphi
qIndustriais qZF
Brasil qZF
Mangotex qDana q
qBosch qProema
Industriai q
qParker Hannnfin s de qDHB
q
qSchaeffler Motores qKostal
Brasil qGates do
qSifco Brasil q
qSKF qMahle Metal
qTakata Petri Leve
qINA / FAG
qThyssenkrupp
Metalurgica qSKF
qTimken do qLitens
Brasil q
qValeo q 24
Source: SINDIPEÇAS qCofap – Magneti
 MANY OF THE MAJOR T2 INTERNATIONAL
PLAYERS ARE PRESENT IN BRAZIL 2(2)
THE MAIN T2 SUPPLIERS

Filters E le ctro n ic Finishing

qMann Hummel qParker qParker

Brasil Bosch Bosch
qFiltros qSiemens VDO qSiemens VDO
Fram qMagneti qVisteon
qTecfil Marelli qLear
qLogan qBosch Corporatio
qEnertec n
q

25
Source: SINDIPEÇAS
 THE BRAZILIAN AUTOMOTIVE SUPPLIER ASSEMBLY
PLANTS
M a n u fa ctu re r E m p lo y e e s B u sin e ss L o ca tio n

Dana Albarus 4,200 Automotive systems and Gravataí (RS), Campo Largo (PR), Diadema, São
chassis components Bernardo do Campo, São Paulo, Sorocaba and Taubaté
(SP).
Delphi 8,000 Electronic, transportation Itabirito (MG), Paraisopolis (MG), Espirito Santo do
Main T1 and T2

components and systems Pinhal (SP), Piracicaba ( SP), Jambeiro (SP),

Cummuns Brasil 1,214 technology
Engine components Jaguariuna (SP
Guarulhos (SP ) ), Cotia (SP), Sao Jose do Pinhasi
(PR), Porto Alegre (RS) and Gravataí (RS)
Suppliers

Magnetti Marelli 660 Auto parts for engines São Paulo (SP), Mauá (SP), Hortolandia (SP), Amparo
(SP), Betim (MG)
DHB Componentes 600 Steering, pumps and hoses Porto Alegre (RS) and Sao Paulo (SP)
Automotivos
TRW Automotive 4,300 Automotive systems , auto part Limeira (SP), Diadema (SP), Santo André (SP), Três
for Steering Corações (MG), Lavras (MG) and Taubaté (SP)
ZF Sistemas de Direção 4,000 Electronic/electrical 2 Sorocaba (SP), Americana (SP), São Bernardo (SP)
controls, manifolds, fuel and Belo Horizonte (SP)
Eaton 1,900 modules
Exhaust manifolds, powertrain HQ, Brantford, Ontario
components
Siemens VDO 1,200 Electronic systems Guarulhos (SP), Salto (SP), Gravataí (RS), Resende
(RJ), Manas (AM)
Valeo 3,300 Metal stampings, tubular São Paulo (SP), Guarulhos (SP), Itatiba (SP),
assemblies, weldments and Campinas (SP), Camaçari (SP), Gravataí ( RS)
systems

26
Source: STC
 T H E T 1 A N D T 2 S U P P L IE R S A R E LO C A T E D C LO S E
T O T H E IR C U S T O M E R S

Cars Commercial vehicles

Map of Brazil

N o rth
N o rtheas
t
C e ntral
S o utheasE
ta
S o uth s
t

Purchasing decisions are

made locally, but
strategic purchasing
decisions must be
approved by HQ outside
Brazil 27
 THE BRAZILIAN AUTOMOTIVE SUPPLIER INDUSTRY IS
A STRONG AND VERY COMPETITIVE MARKET

Trends within the Brazilian Automotive

supplier industry
qThe Brazilian automotive supplier industry is a
consolidated market
Consolidation
Consolidation
qThe main international players have sales
and/ or production in Brazil
qEmerging markets are an opportunity for the
qIncreasedalready consolidated
competition Brazilianprices
and continued suppliers
reductions
Competition
Competition and
and price
price reductions
reductions qThe profit margin are declining
qThe valuation of the Real against the USD &
Euro have made imports cheaper, especially
those from Asia (China)
qClose to, or in the OEM´s industrial plants
R&D-displacement/
R&D-displacement/ Logistic
Logistic
qOEMs demand parts assembled to a greater
extent before delivery
qOEMs are continuously demanding higher
quality in: the products, time of delivery
and support
28
interviews and analysis, Anfavea, SindiPeças -Association of Vehicle Component Manufacturers
CONTENT

n Overview Brazilian Manufacturing Industry



n Brazilian Automotive Industry



n Brazilian Construction Equipment Industry



q Manufacturers
q
q Suppliers


n Recommendations


n References


29
THE TURNOVER OF CONSTRUCTION AND MINING MACHINES
VARIES OVER THE YEARS

Estimated Internal Market Size

900 USD million

800

0.3%
700 7
600

500

400

300

200

100

0
01 02 03 04 05*

Year

After a dip in 2003 the industry has recovered

30
 T H E P R O D U C T IO N O F C O N S T R U C T IO N A N D M IN IN G
M A C H IN E R IE S H A S A L M O S T D O U B L E D IN T H E L A S T
TH R EE YEA R S

Estimated Internal Market Size

Compactors
5% Crawler Dozers
15%
Moto Grader
unit 20%
20000
17,786 Backhoeoaders
16000 19%

12000 Off highway

Trucks
8000 4%

4000
Hydraulic
Wheeled
0 Excavators
Loaders
12%
01 02 03 04 05 25%

Year

Wheeled loader is the biggest single segment

31
 MANY OF THE INTERNATIONAL CONSTRUCTION
EQUIPMENT MANUFACTURES ARE PRESENT IN
BRAZIL CONSTRUCTION EQUIPMENTS ( 17 , 786 units )

Wheel Hydrauli Off high way Motor Compacto

Crawlers Backhoe
Loader c Truck grade rs
(2,681) (3,421)
(4,527) (2,060) (715) (3,579) (803)

n3 n6 n5 n5 n3 n5 n3

m a n u fa ctu re r manufacturers manufacturers manufacturers manufacturers manufacturers manufacturers

qAGCO qCaterpi qCaterpi qCaterpi qCaterpi qCaterpi
s llar llar llar llar llar
q Caterpi
qCaterpi llar qCase qCase qRandom qCase qIngerso
llar qCase qNew qNew qVolvo qNew ll*
qNew Hollan Hollan Hollan qDynapac
qNew
Hollan d d d
d Hollan qCiber
d qKomatsu qKomatsu qKomatsu
* Imported Brands
qKomatsu
qRandom qVolvo qVolvo qVolvo
qJCB qBobcat*

32
Source: DEEE/
 MOST OF THE COMPANIES PURCHASE DECISION ARE
MADE LOCALLY

M a n u fa ctu re r E m p lo y e e s P ro d u ctio n V o l Purchase decisions

AGCO 2182 1158 Locally

Agrale 1164 1053 Locally

Caterpillar 4000 Does not disclose Mainly locally

information
Case/New Holland 2300 7649 HQ and locally
Ciber 500 ~ 13,000 HQ in Germany or locally

Dynapec 100 500 Locally

JCB Does not disclose Does not disclose Locally

information information
Komatsu 472 2000 Locally or ,approved by HQ in Japan

Randon 6000 Does not disclose Locally

information
Volvo 1589 Does not disclose HQ in Sweden or lower orders locally
information

33
Source: STC
 SOUTHEAST REGION IS THE MAIN CONSTRUCTION
EQUIPMENT CENTER

Map of Brazil

PIRACICABA, SAO PAULO

* SOROCABA, SAO PAULO

SUZANO, SAO PAULO

SOROCABA, SAO PAULO PEDERNEIRAS, SAO PAULO

N o rth
N o rtheas
t
C e ntral
S o utheasE
ta
S o uth s CURITIBA, PARANA CAXIAS DO SUL, RIO GRANDE DO SUL
t
PIRACICABA, SAO PAULO
CONTAGEM, MINAS GERAIS

3 CAXIAS DO SUL, RIO GRANDE DO SUL

MANAUS, Amazonas*

CANOAS, RIO GRANDE DO SUL

SANTA ROSA, RIO GRANDE DO SUL
MOGI DAS CRUZES, SAO PAULO PORTO ALEGRE, RIO GRANDE DO SUL
34
CONTENT

n Overview Brazilian Manufacturing Industry



n Brazilian Automotive Industry



n Brazilian Construction Equipment Industry



q Manufacturers
q
q Suppliers


n Recommendations


n References


35
 CONSTRUCTION EQUIPMENT SUPPLIERS
- many of the international suppliers are present
in Brazil
THE MAIN CONSTRUCTION EQUIPMENT SUPPLIERS

Propulsion
Electrical Steel Accessories
and running Hydraulics
systems construction
gear
Cables, sensors, Power train, engines,Undercarriage and All kind of Other components
semi conductors, exhaust systems, body hydraulic qThyssenKru
control units axles qZF cylinders pp
qKabel qJohnson qGetrag qThyssenKru qPilkington
qQuantiun Controls qLuK
pp qWebasto
qSiemensVDO qLear qParker
qBosch
qBosch qBehru qWebasto
qVisteon
qDelphi q SiemensVDO qDeutz
qHidrover
qBosch qSoprano
qViscont
q

36
: SINDIPEÇAS -Association of Vehicle Component Manufacturers
 THE BRAZILIAN CONSTRUCTION EQUIPMENT SUPPLIER
ASSEMBLY PLANTS
M a n u fa ctu r E m p lo y e e s B u sin e ss L o ca tio n
eSiemens
r VDO 1,200 Electronic systems Guarulhos (SP), Salto (SP), Gravataí (RS),
Resende (RJ), Manas (AM)
Bosh 11,000 Machined components and modules for 2 Campinas (SP), Barueri (SP), Curitiba
engines, transmissions and chassis (PR) and Aratú (BA)
Delphi 8,000 Electronic, transportation components Itabirito (MG), Paraisopolis (MG),
Main Construction and

and systems technology Espirito Santo do Pinhal (SP),

ZF Sistemas de 4,000 Electronic/electrical controls, 2Piracicaba
Sorocaba ((SPSP),),Americana
Jambeiro ((SP ), São
Equipment Suppliers

SP),
Direção manifolds, fuel modules Bernardo ( SP ) and Belo Horizonte
Jaguariuna (SP), Cotia (SP), Sao Jose (SP)do
Visteon 2,061 Climatization, audio and electronics Pinhasi
Camaçari(PR
(BA),),Porto
ManausAlegre (RS) and
(AM), Guarulhos
components Gravataí
(SP) ( RS )

ThyssenKrupp 3,200 Body & Chassis and powertrain Campo Limpo Paulista (SP) and Santa
components Luzia (MG)
Pilkington Does not Glass components Caçapava ( SP)
disclose
Lear information
Does not Seat systems, electronic products, Betim ( MG)
disclose electrical distribution systems and
Luk 1information
,280 Design and manufacture
other interior productsof automotive Sorocaba (SP), Mogi Mirim (SP)
clutches, tractor and truck clutches
and torsion dampers

37
M O S T O F S U P P L IE R S A R E LO C A T E D C LO S E T O T H E IR
C U STO M ER S

Map of Brazil

North
Northeas
t
Central
SoutheasE
ta
South s
t
Pu rch a sin g d e cisio n s
a re m a d e lo ca lly , b u t
stra te g ic p u rch a sin g
d e cisio n s m u st b e
a p p ro ve d b y fo re ig n H Q

38
 T H E B R A Z IL IA N C O N S T R U C T IO N E Q U IP M E N T
IN D U S T R Y IS A H U G E M A R K E T

Trends within the Brazilian construction

equipment industry
qThe Construction equipment industry is
consolidated
Market
Market
qSuppliers tend to increase their portfolio
of products
qDemand is met by local producers.
qIncreased
q competition and continued prices
reductions
Ø
Cost
Cost and
and Price
Price qThe margins for domestic CE products are
declining
qThe valuation of the Real against the USD &
Euro have made imports cheaper, especially
qClose to, those
or infrom
theAsia
OEM´s industrial
(China ) plants
qJust in time delivery and new technologies
Logistic
Logistic// Technology
Technology qIT utilizations for new projects and
management systems (Customization of
equipment)

Source: STC interviews and 39

analysis, National Society of
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
n Brazilian Construction Equipment Industry
n
n Recommendations
n
n References
n

40
 STC IS THE RIGHT PARTNER FOR SWEDISH COMPANIES
TO DO BUSINESS WITH THE BRAZILIAN AUTOMOTIVE
INDUSTRY
Country
specific
Do a thorough analysis of the market - how to enter and work on it, plus
11.. costs and legal issues. Find the right partners.

Establish a close relation with the customers, a local presence, by

22.. finding a strong partner or establishing a proper local business unit

Focus on doing business development and avoid spending too much

33.. time on administration – let other do the bureaucracy

Industry
specific
Make sure you reach your most important customers – be close to where
11.. they are located. The country is big and the OEM plants are spread out

All OEM´s strive for as much local content as possible: If possible

22.. produce some part of the product in Brazil

Develop a strategic plan for establishing a proper local company to reduce

33.. import costs, reduce costs and to be close to the customers

41
Source: STC
CONTENT

n Overview Brazilian Manufacturing Industry

n
n Brazilian Automotive Industry
n
n Brazilian Construction Equipment Industry
n
n Recommendations
n
n References
n

42
 HOW CAN STC IN BRAZIL SUPPORT COMPANIES
TO DO BUSINESS IN BRAZIL

Country
specific
STC performs research that can be smaller market check up to big market analyses.
Market
Market Research
Research Examples are identifying market size, find potential customers, how to enter the
market, competitor analyses and legal and cost issues

STC searches, identifies and evaluates potential partners for example: Distributors,
Partner
Partner search
search Representatives, Suppliers and Contracts Manufactures. The Project normally starts
with market check

Visiting
Visiting Program
Program STC sets up visiting programs with companies, institutes, authorities, supports
with languages, cultural understanding and advises the company on business issues

Pre
Pre Acquisition
Acquisition analysis
analysis STC analyses and scans potential acquisition targets from smaller company
analyses to complete due diligence

Business Support Office (BSO), where STC Brazil provides a variety of services for
BSO
BSO Swedish companies to support business activities. Examples are company
registration, administration of the subsidiary, infrastructure such as office space,
and consultancy

Legal STC provides referral to reputable law firms or experienced lawyers with expertise
Legal on the subject matter, when needed. Among examples are assistance with
contracts/agreements, trademarks, patents, and incorporation.

43
STC HAS HELPED NUMEROUS SWEDISH COMPANIES
TO DO BUSINESS WITH THE BRAZILIAN
AUTOMOTIVE INDUSTRY
- some of them are:
CO M PAN Y P R O F IL E

B u n ks fo r la rg e tru cks

H ig h stre n g th ste e lsh e e ts

IT so lu tio n fo r p u b lic
tra n sp o rt se cto r
Lo a d ca rrie rs fo r ca rs, ro o f
ra cks, ro o fto p b o xe s a n d
b ike ca rrie rs
A u to m o tive co m p o n e n ts
a n d syste m s

B ra ke syste m s, h yd ra u lic
syste m s, tra ctio n syste m s

44
STC OPENED UP SUBSIDIARY AND PRODUCTION
FACILITIES FOR THULE IN BRAZIL

Goal
Goal
T h u le h a d sa le s in B ra zilth ro u g h a d istrib u to r b u t w a n te d to in cre a se
m a rke t o f ro o fto p b oxe s in La tin A m e rica .

STC
STC role
role and
and contribution
contribution
•O p e n in g u p o f th e su b sid ia ry a n d su p p o rt fo r th e sta rt u p o f th e
p ro d u ctio n o f ro o fto p b oxe s.
•B u sin e ss S u p p o rt O ffice d u rin g sta rt u p p h a se .
•R e cru itm e n t o f sa le s m a n a g e r La tin A m e rica
•R e o rg a n iza tio n o f th e B ra zilia n a ctivitie s m e rg in g th e
im p o rtin g / exp o rtin g , d istrib u tio n a n d p ro d u ctio n .

Results
Results
•Production on Brazil of rooftop boxes and increase sales volume in
Latin America of these products.

45
 STC PARTICIPATED IN ALL THE STEP REGARDING
THE ESTABLISHMENT IN BRAZIL OF

GG oo aall Outline
Outline of
of project
project
T h e m a in o b je ctive o f th e p ro je ct w a s to
su p p o rt S S A B d u rin g th e e sta b lish m e n t in Step
Step 11:: Market
Market
analysis
analysis
B ra zil
SS TT CC ro
ro le
le aa nn dd co
co nn trib
trib uu tio
tio nn
Step
Step 22::
•G ive S S A B a co m p le te p ictu re o f th e B ra zilia n Logistics
Logistics study
study
m a rke t a n d h o w to o p e ra te in B ra zil
* Basis for decision on how to enter the Step
Step 33 :: Study
Study on
on
m a rke t cost
cost
and
and
•E sta b lish m e n t o f su b sid ia ry in S ã o Pa u lo a n d legal issues
legal issues
b ra n ch o ffice in C u ritib a
Step
Step 44::
•B u sin e ss S u p p o rt o ffice d u rin g sta rt u p p h a se Establishment
Establishment
in clu d in g sta rt u p o f im p o rts a n d sa le s a n d of
of
subsidiary
subsidiary
re cru itm e n t o f lo ca l sa le s m a n a g e r.
RR ee ssuu lts
lts Step
Step 55:: BSO
BSO
•S a le s o ffice s fo r S S A B H a rd ox a n d Tu n n p lå t
a re u p a n d ru n n in g .
Step
Step 66 ::
•S u b sid ia ry e sta b lish e d im p o rtin g a n d se llin g Recruitment
Recruitment
p ro d u cts lo ca lly. 46