Brazil: Auto parts sector raises investments

After three consecutive years of low revenues, employability and investments, the auto parts industry starts to rise again, due to more sales in the internal and external market and by its own exportation. In the following days, the workers union that is responsible for this sector (Sindipeças), shall reevaluate the 2017 growth projection of 10% for vehicles production, according to their president, the new prediction is that the industry will have a production growth of 20% this year.

Higher demand and new government project stimulates the industry in Brazil
Higher demand and new government project stimulates the industry in Brazil

By acknowledging that this sector is recovering from the past few years of crisis, new job positions are opening and the industry’s income of July of 2017 is 17,2% bigger than the total of the same month of 2016. This perspective should improve even more in the next years since the Brazilian government is launching soon a new industry politics project named Rota 2030 (Route 2030). Route 2030 will have its tax considerations, the main theme of the project, defined at the end of September, 2017; the expectation is that by October it will already be a government’s decree. It also aims to amplify company’s participations on existing tools. One of the most talked about examples, is the possibility of a government funding for groups formed by larger companies that should help smaller business to manage and to advance in research and development for the upcoming automobile sectors changes.

As this new program is settled, the auto parts producers industry motivates itself for new investments. For 2018, Sindipeças expects US$2.5bi in investments, which would be equivalent to the levels of 2014, doubling the volume of 2016 that was only US$1.5bi. Together with Mercosur and European Union international agreements and Route 2030, Brazil will have a stronger possibility in becoming more competitive in the global market.

Would you like to introduce your expertise to Brazil and explore business opportunities? Contact Fabio Speciale, our consultant for Brazil. Contact him now

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