Year 20 | April 2012 | Edition 272

From the Top

Grace LiebleinProduct launch

Grand SienaAutomotive Regime

A New Cycle

AutoData kicks off 20th anniversary celebration and gathers three of the main leaders of the sector to talk about the future of the industry.

Debate

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26 | Debate

From the assembly line to the storeIn order to start the celebration of its 20th anniversary, AutoData gathered the country’s major representatives of the automotive chain for a chat about the future of the industry.

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16 | Automotive Regime A package of incentives has the objective of making the country move up the global vehicle production ladder

21 | Ranking 1st quarter sales drop, but Anfavea holds on to the year s growth projections

22 | Management Succession plan is the homework needed to guarantee a promising future

36 | Geneva Auto Show Swiss event shows the bet that the crisis in Europe will be faced by emotion

40 | Product launch Siena now is a surname. The model has physically grown, given the name Grand

44 | Product launch General Motors increased the Cruze family with the Sport6, a hatchback version of the model

47 | Product launch Kia brings the Optima and plans to sell the entire first lot of 3.2 thousand units in 2012

48 | Imported models One year later, Jac is offering four options, with lower than expected sales volume

51 | Two wheels Harley-Davidson do Brasil inaugurates a new manufacturing facility to increase presence in the country

Directors Fred Carvalho, ombudsman, Márcio Stéfani, S Stéfani, Vicente Alessi, filho | Assistant to the Directors Expedito M dos Santos | AutoData in the Internet: AutoData Portal: www.autodata.com.br, blog: www.autodatablog.wordpress.com, You Tube: www.youtube.com/autodataeditora, Twitter: www.twitter.com/autodataeditora | Editorial Board Fred Carvalho, Márcio Stéfani, S Stéfani, Vicente Alessi, filho, Fernando Calmon, Mauro Forjaz (1922 - 2009), Rik Turner, Sérgio Duarte, Tide Hellmeister (1942 - 2008) | Newsdesk Vicente Alessi, filho, director, George Guimarães, co-director, Fred Carvalho, Márcio Stéfani and S Stéfani, editors, Alzira Rodrigues, chief editor, Décio Costa, executive editor; Marcos Rozen, executive editor, André Barros, Maira Nascimento, Roberto Hunoff, from the branch in Caxias do Sul, RS, AutoData News Agency reporters | Graphic Project Ponto & Letra, www.ponto-e-letra.com.br | Art Romeu Bassi Neto, News Designer, Camila Rodrigues Cunha, Intern | Photography DR e Divulgação | Digital Media Marcos Rozen, editor, Erick A do Nascimento, Gustavo Pereira, Paulo Fagundes and Aline de Souza Andrade, Intern | Events/Seminars Tel.: PABX 11 5189 8900 Vinícius Romero and Lorrayne M Borges | Business Department Tel. PABX 5189 8900, fax 5181 8943 Rinaldo Machado, co-director | Commercial and Advertising André Luiz Martins, Elisa Abdulack, Rosa Damiano, Wanderley Sicchi, Carolina Zanini, from the branch in Caxias do Sul, RS, account executives, Vanessa Vianna, marketing supervisor, Adenílson Aparecido da Silva and Cíntia Filareto, marketing assistants | Subscriptions/Customer Services Tel. PABX 11 5189 8900, fax 11 5189 8942 Vera Lúcia de Paula | Financial Department Vera Lúcia Cunha, co-director, Ana Lúcia N Handro, Hidelbrando C de Oliveira, Márcio Dourado Silva | Administrative support Diva de P Bonomi, supervisor, Cirléia R Costa, Gilberto S Santos (1974 – 2000), Márcio Barreto da Costa, Maria Aparecida de Souza, Maria Elza C Neves, Noé M de Jesus, Simone R Costa | Print run 10 mil | Pre-printing and printing Intergraf Ind. Gráfica Ltda tel. 11 4391 9797 | ISN 1415-7756

AutoData is an AutoData Editora Ltda. publication, R. Verbo Divino, 750, 04719-001, Chácara Santo Antônio, São Paulo, SP, Brazil, tel. PABX 55 11 5189 8900, fax 55 11 5181 8943. Copying without permission is forbidden, however, it is allowed provided the source is mentioned in the citation. | Responsible Journalist Vicente Alessi, filho, MS SJPESP 4 874

Year 20 | April 2012 | Edition 272

Cover: Simão Salomão

4 | From the Editor 6 | On&Off

10 | From the Top60 | Meanwhille65 | Think big75 | People&Business

154 | Article

Sections

54 | Import Since the ports were re-opened, five million imported vehicles entered the country

56 | Strategy Daimler plans production volume of 2 million units for Mercedes-Benz up to 2020

62 | Business Neobus seals partnership with Navistar and increases its firing power in the micro-bus segment

66 | Market Manufacturers give increasing attention to the medium sedans segment

69 | Supplier Delphi South America celebrates 15th anniversary with a successful business model

4 April 2012

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Exactly two decades ago, the Brazilian automotive industry celebra-ted what we can today call the beginning of its Modern Age. The sector chamber, whi-ch generated the first automotive agreement, drove the sector out of a stagnant and, at times, declining stage that had been going on for a decade.

After government, industry, and workers reached an agreement, a new investment cycle took place in the country, which included the arrival of a number of automakers. In October of that same year, 1992 - not by chance - AutoData came into being, under the form of a newsletter that intended to debate and analyze this renewed automotive industry that was opening itself to the challenges of globalization. In April 2012, the government announced a new incentive plan, exactly when AutoData - which, in this edition, exceeds the mark of the 20,000th published page - begins celebrating its 20th anniversary. Could this represent a new period? It is still too early to tell. There are enormous challenges, significantly bigger than the ones that existed in the early 90s, as can be noted from the innovative interview with the main leaders of the sector in this edition, stamped on the cover page and throughout a dozen pages. At the very least, the drawing of a clearer horizon starts to be drafted. It is considerably more ambitious and, after all, the effort now is not one of entering the game. It is to remain in it.

George Guimarães, editorgguimaraes@autodata.com.br

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Another one from Minas Gerais

Case New Holland is planning to have a new manufacturing facility established in Montes Claros,

MG, to initially produce construction equipment. The unit, which should be inaugurated in 2014, and consume resources valued at R$ 600 million, will be

the company’s second unit in the state. The company is expecting to generate 2.7 thousand jobs, including

700 direct, and the remainder in the parts and components supplier Paul that should be established in an area neighboring the future production facility.

There is a protocolThe state of Espírito Santo may gain its first vehicle

producer: Bramo, Brasil Montadora de Veículos, a company belonging to the Districar Group, which

today imports SsangYong, Changan, and Haima models. The facility would be located in the city of

Linhares. The US$ 300 million investment would result in the facility assembling cars from these brands.

CollectionThe Volvo XC60 has undergone nothing less than

nine recalls in Brazil during the past three years. The last one was to verify the electric wire harness under

the front seats of the model-year 2012 cars. The vehicle also involves the S60 2012 model.

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It’s an important moment in the life of Volkswagen in Brazil. The company has just defined that its unit located in Taubaté, SP, will receive investments in order to expand production volume. Possibly, the unit will be tasked with producing the company’s subcompact model, the Up! Thomas Schmall, president of the company, explained why VW’s newest unit in the country, São José dos Pinhais, PR, was not included in the plan. “We need to

It’s Taubaté

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EstreiaA nova geração do utilitário esportivo Chevrolet chamado no Brasil de Blazer

e de Trailblazer em outros mercados foi apresentada no Salão do Automóvel de

Bangcok, Tailândia. Lá as vendas começam em junho. O modelo, assim como a picape

média S10, da qual deriva, foi desenvolvido como produto global na unidade GM de São Caetano do Sul, SP, e será produzido em São

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BigAround R$ 26 million will be spent by Librelato this year to upgrade its manufacturing and product development area as. The Unit 2, located in Içara, SC, should receive R$ 9 million of the total amount. José Carlos Librelato, president, says the company is working to the one of the three biggest manufacturers of road implements in Brazil by 2020.

7 April 2012

Four lessToyota and the Soto, metalworkers union closed a deal that establishes a 40-hour work week at the company’s future manufacturing facility. The manufacturer had initially wanted to start with 44 hours and reduce the total gradually.

MegadealA new MWM International line produces the Chevrolet 2.8 CTDI engine for the S10. In order to structure the operation, which involves the company’s three plants in South America, a total of US$ 80 million were invested.The unit in Canoas, RS, was prepared to assemble 60,000 engines per year for shipment to GM in São José dos Campos, SP. At the plant in São Paulo, SP, the company works on the engine block and, in Jesus Maria, in Argentina, the same operation is conducted on the cylinder head. The contract signed by the two companies establishes the supply of 300,000 units between 2012 and 2018. According to José Eduardo Luzzi, president of MWM International, the estimated revenues from the contract are valued at R$ 3 billion. “This is the biggest contract ever closed by GM and a supplier in Brazil. It is also the biggest contract for MWM with a vehicle manufacturer in the region.”

Chery and Jaguar Land RoverChery and Jaguar Land Rover established a joint venture in the Chinese market. The deal calls for the construction of a research and development center and an engine manufacturing facility, as well as a production unit for Jaguar and Land Rover vehicles, as well as vehicles from a still unnamed brand.

In productionMercedes-Benz is already producing the new Sprinter in Buenos Aires, Argentina. The vehicle is scheduled to arrive in the market this month.

StrongVidroforte registered gross revenues of R$ 100 million last year. Eduardo Heinen, president, calculates this year will see revenues increase 18%.

improve the productivity ratios at that facility.” In 2011, the local union and the vehicle manufacturer engaged in a battle that culminated in a 39-day strike. The company still needs to determine when the construction activities will begin. Schmall says that the Production capacity increase will be justified only by the domestic market’s growth. “Until now, the market has still illustrated it will follow the same level as in 2011.” The executive said the choice to expand the existing unit was more advantageous than building a new facility. “We can take advantage of the logistics, suppliers, and trained labor structure.” However, he made it clear that the increase of production in Taubaté will happen in a new manufacturing facility within the already existing complex.” Schmall did not reveal the value of the resources that will be used to expand production in the country, but he confirmed that it will represent an additional amount compared to the R$ 8.7 billion already forecast for the percent in operations up to 2016.

RehiringBy June, close to 2.6 thousand outsourced workers

from the logistics area at Fiat in Betim, MG, will be hired by the automaker. The workers, who are

currently employees of Ceva Logistics and Syncreon, work in the factory. Ceva says that all of the internal

materials handling will be absorbed by Fiat. Still according to the company, the contract for the

management and distribution of parts and accessories to Fiat’s dealership network has been renewed for

another period of three years. The contract also calls for transporting components to Betim.

There alsoThe lack of qualified professionals, such as

engineers and technicians, is also starting to affect the automotive industry in Argentina. A

study conducted by the consulting firm Adecco concluded that 77% of the companies in the

sector are looking for professionals for the manufacturing area.

8 April 2012

ExclusiveFlash de Motor’s website states that GM and PSA will develop to exclusive models, including a low-cost subcompact, for South America. It should be in the market in 2016.

Loss #1Starting this month, Mexico will begin receiving the Renault Sandero and Stepway imported directly from Colombia. Up to now, these products were being delivered from Brazil.

Loss #2Last year, the Duster produced in the state of Paraná was replaced by the same model produced in Colombia. Mexico and Colombia have an automotive free trade agreement.

Now, yesDino Maggioni is the new president of Magneti Marelli in the Mercosul. Born

in Italy, Maggioni had been responsible for the Aftermarket P&S, a position he will continue to accumulate. His nomination solved a six-month gap during which the company remained without a president. In September, the systems supplier announced that Virgílio Cerutti, president of the operation until

then, was nominated to take over the global suspension, modules, and plastic components division, and that Khalid Qalam would replace him. Surprisingly, after already having obtained a visa to work in Brazil, Qalam left the group.

New CumminsCummins will have a new manufacturing facility in Itatiba, SP. The unit should absorb an investment of R$ 163 million and is scheduled to be inaugurated

in March 2014. Initially, the generator set group and the parts distribution center units will be transferred

to the new facility. A possible candidate to change address is the Cummins Turbo Technologies, CTT,

division. The Filtration and Emissions Solutions divisions, both located today in Guarulhos, SP,

could also be moved to the new facility. According to Cummins, the unit will have a total production capacity of 12,000 energy generator sets per year

and 1.2 million components or subcomponents per year. As a result, the facility in Guarulhos will have

more space for future expansion with a focus on the production of engines.

Took controlChery put its plans in overdrive and took over the

entire Brazilian operation, which, until then, had been shared with Venko Motors Group, responsible

for importing and managing the dealership network since 2009.

Honey, in exchange for tiresPirelli, which investigated the possibility of building a distribution center in Goiana, PE,

to meet demand from the future facility in the city, made a curious agreement in Argentina. The company will export US$ 100 million in honey in order to be able

to import the same value in raw materials needed to produce tires in the country.

Product launchThe new generation of the Chevrolet sport utility known

in Brazil as Blazer, and as a Trailblazer in other markets, was presented at the Bangkok Auto Show, in Thailand.

Sales in that country are scheduled to begin in June. The model, similar to what happened with the S10 medium

pickup, from which it derives, was developed as a global product at the GM unit in São Caetano do Sul, SP, and

will be produced in São José dos Campos, SP.

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10 April 2012

Interview to Alzira Rodrigues and Marcos Rozen . redacaoad@autodata.com.br

Pictures Simão Salomão

Grace Lieblein

Undergoing a transformation phase

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11 April 2012

This year alone, General Motors in Brazil launched the Cobalt, Cruze, and the S10. Isn’t it very risky to renew the entire line at once?

I don’t think so. General Motors do Brasil is undergoing a transformation process and renewing its entire portfolio. In addition to the S10, there will be six models still this year. This is an exciting moment for us, since we will expand the options to our consumers.

How has GM explained to the consumers that it will change its entire line in only one year? Isn’t there a risk of losing customers? A risk that they will postpone the purchase in order to wait for the new product?

No. We have a history in Brazil and we are only expanding the options, not limiting the choices. On the contrary. We are going to attract more customers to the brand with different products that we did not have before. We will keep our customers and conquer additional ones with the new vehicles.

Year to date, GM was the only company to register a sales increase when compared to the other three top players. Is this a reflection of the line renewal policy?

Perhaps, but having a bigger market share is not our main objective. We want to be the biggest brand in the opinion of our consumers, which means having excellent products in the

Jaime Ardila, president of the General Motors for South America,

presented Grace Lieblein slightly before she arrived in the country to take over as

president of General Motors in June of last year, with the certainty that he was gaining

the right partner for the right place: “She is the type of person that can assure GM will

continue to innovate in design, production, and sales of world-class vehicles. It was not

a simple compliment from the opportunity to create a good image to the sector. Grace

Lieblein has 33 years of experience at GM. She arrived in the country after managing the

subsidiary in Mexico. She also led the development and introduction of the company’s

global manufacturing system, and was director of design engineering at General Motors

North America’s car division.

It is certainly a significant experience to lead the company’s current phase, which involves

the complete renewal of its line of models. Grace Lieblein does not allow herself to hide

the challenge and advises, “This is a year of transformation for General Motors. We are

transforming our portfolio, our plans, and our business. We have, and will have, excellent

products at our dealers.”

12 April 2012

portfolio, in addition to excellent service. We are working in that direction.

Still in relation to the renewal of the line, the Vectra, for example, is no longer in the market. Should the same phenomenon occur with the current line?

That will depend on the market. We have models that are important for Brazil and for the current customers. Consequently, we will analyze the sales rhythm. We cannot take out all of the successful models from the market. We will work with both lines because we believe that to be active in the Brazilian market we need a complete range that targets all of the segments.

When only one new product goes into production, there is a need to adapt the plant. How can the assembly line be managed with five or six new products?

It is really a significant challenge. In addition to changing the portfolio, GM is also transforming its plants. We plan to invest more than R$ 5 billion between 2008 and the end of this year. A good portion of the resources will be applied in the plants. We are transforming almost all of the plants: São José dos Campos, in December, São Caetano do Sul, in January, and Gravataí, in February. It is difficult for the units to produce the current models while preparing themselves for the new ones, but all of the teams are prepared for the effort, from our own employees to those of the suppliers.

Is it possible to say that, in the inside, the plants are new?Yes. The adaptations and the reforms currently underway are resulting in almost new plants.

In addition to the adaptations at the assembly line for the new models, GM is also increasing its capacity.....

Yes. The plant in São Caetano do Sul is working on three shifts and we are expanding the capacity in Gravataí, although I still can’t say how much.

Brazil closed a new agreement with Mexico that is based on quotas. You know that market very well for having worked there. What’s your evaluation of the new agreement?

We are still studying the effects. We still do not know how the quotas will be divided and, therefore, we are analyzing the different alternatives. For the meantime, we will continue to import the Captiva, and export the Montana. In any event, it is an important business for GM and the other brands, as well.

Did GM have a plan to bring another model from Mexico that was

The adaptations and reforms we are implementing will make our plants become almost new.

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affected by the new measures?As mentioned, we are studying the different alternatives. General Motors is a global company with products in all of the regions in the world, and Mexico is not different.

In addition to the Captiva, what other models are produced in Mexico?

We produce the Aveo and some Cadillac models.

The news has significantly emphasized that the cost of labor in Mexico is a lot lower than in Brazil. Is this a reality? Why does Mexico have this advantage?

Some studies show that Mexico is more competitive. However, in Brazil, the industry needs to work its costs. We have costs that are increasing, such as labor, raw materials, logistics, etc. We have a task to accomplish, as an industry, in order to become more competitive.

Using the Montana as an example, does GM Brazil manage to place it in Mexico at a competitive price?

Yes, but even still, the export business from Brazil is difficult, given the costs and the current exchange rate.

Some years ago, the exchange rate was favorable for exports. Volumes, at the time, were not very different from those today, and the sector complained about the costs of imports of raw materials. Is it really an industry-wide issue, or does the exchange rate represent the biggest challenge?

It’s really a broad issue. It involves a number of different aspects. Yes, the exchange rate accounts for a good portion of the current situation, but competitiveness, also. We need to work to reduce the costs within the entire chain. It is important for the whole industry in Brazil.

Trade with Argentina is higher. How is the relationship with that country, more balanced?

The plant in Rosario is part of our Mercosul business. We import the Agile, an important model for Brazil, but we also ship many cars to that country. Therefore, it is part of our manufacturing system in the region.

Argentina has made it clear that it does not wish to import automotive parts and is trying to increase local manufactured content. How does GM deal with the issue, a global company that cannot work how it would like to?

We work in a manner so we can import and export. We always need to adapt our business to the rules of the governments and,

The estimate of growth for Brazil is big, and everyone wants to be here to have a part of this growth.

14 April 2012

in this case, it is also important to be adaptable.

Are some of the programmed launches going to be produced there?We have not announced that.

GM is building an engine and transmissions plant in Joinville. From a cost perspective, would it not be cheaper to import these products?

The plant in Joinville will start producing engines at the end of the year. We have just announced the investment for a transmissions unit. We currently import some engines and transmissions from different places in Europe and it is important to have this capacity in Brazil.

So it makes sense to produce in Brazil?Yes. In fact, we will even start to export engines and transmissions to some General Motors units. I believe we will not need to import any more.

Can you tell us to where the engines and transmissions produced in Joinville will be shipped?

Unfortunately, not yet.

When Gravataí was inaugurated, it was considered a reference of how an automobile plant should be, with the suppliers nearby. However, the model was not copied to other GM units. Why?

I do not have a clear answer to that question, either. It is certainly a good production system and we will continue with this model, because having our suppliers nearby is a big advantage. It is impressive how the system works. The time necessary for change, for example, is much reduced because everyone can see the projects and participate. Perhaps it has not been directly copied, but many brands have plants with suppliers nearby. Is it is a good idea.

This year marks the end of a R$ 5 billion investment cycle. Is GM already negotiating the next round of investments?

Yes, clearly. We are studying many things. In the previous cycle, we started with the products and the investments in our plants.

Is there a possibility that GM will build more plants in the country?There are many possibilities and, clearly, this can be one of them. We are studying many things. The growth forecast for Brazil is big, really impressive, and everyone wants to remain here in order to have a part of this growth. We are studying to define the value and, very soon, we will have a plan with the investments.

Will this announcement be made this year?Yes, we may have a plan still this year.

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The plants are beginning to look to the north and northeastern region of the country, such as Ford and, more recently, Fiat. Is GM thinking about having a plant there? After all, the biggest growth has been there.....

There are many factors affecting the decision of where to locate a plant. Each mark has its own strategy for this. Obviously, growth is a part of these factors. However, I also think there are other factors that contribute to this decision.

Nevertheless, if the decision were yours to build a new plant in the country, where would it be? Would it be in the Northeast?

Perhaps, but there are certainly pros and cons. The construction of a plant requires many considerations.

You commented that you have traveled a lot through Brazil. What is the purpose of this travel?

In addition to visiting the plants, I want to know our dealers. It is important that I learn about our network. We have an excellent Chevrolet dealer network in Brazil, with a strong focus on the customer. I did this in Mexico also. It is important to visit the dealers and talk to the salespeople and the technicians in order to see what is happening outside of my office. It is difficult to learn being closed in the office.

The automotive sector in Brazil, and perhaps in the world, has never had a tradition of having women in senior positions. How is this experience, principally in relation to the suppliers and the dealers? Do you feel some resistance?

No, it is excellent. I was received with open arms by all of the teams, not only at General Motors, but also throughout the supply chain. And I thank all for this. I have a mission, and I will work it my way. Credibility follows the steps of the achieved results, and that’s where it doesn’t matter if it is a man or a woman.

However, in the case of being a woman, isn’t the responsibility bigger? For example, when something goes wrong - which, unfortunately, is not rare - in light of the macho vision of the sector, attributing the cause of the problem to the fact of being a woman…?

I do not think that way because, for me, that is not constructive. Diversity, for GM, is part of its business. We evaluate the leaders based on their capacities, whether woman or man. We have women in very important positions throughout the world.

Does that happen with the new president of GM Argentina?Yes, Isela Costantini. I am happy for this. Isela is a leader with a lot of potential and she is certainly very good news for us.

Credibility follows the steps of the results achieved, and that is where it does not matter whether it’s a man or a woman.

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Sector players hail the new measures of incentive to the local industry, betting that Brazil should move up the global production ranking

Text Autodata Newsdesk . redacaoad@autodata.com.br

The Brazilian automotive industry is now beginning a new development cycle. Finally, on April 3, the long-awaited directives of a new regime for the sector were announced. The measures are expected to be in place up to 2017. The feeling is that another page has been turned in the history of the automotive industry. The new blank page, at least in thesis, is full of potential to be written with new ink.

Part of a broad package of incentives to the Bra-zilian industry, the new automotive regime was well received by the major players in the sector. This time, their proposals and opinions were taken into account by the government. Therefore, the players participa-ted in putting together the new rules.

The decision to provide incentives for local pro-duction happens exactly 20 years after the first au-tomotive sector agreement, still considered today as one of the major marks of the Brazilian vehicle industry.

Cledorvino Belini, president of Anfavea, believes the recently announced measures are “a big step for Brazil,” since they offer a long-term horizon to the automotive industry. According to him, Brazilian companies in the sector should pay fewer royalties since the new regime instigates local innovation and technological development.

According to the president of Anfavea, the new automotive regime, in association with sector poli-cies and competitiveness structures, can consolidate Brazil also as a world-class vehicle producer. That is, in addition to having a big market, the country may

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17 April 2012

have enough production volume to move up in the ranking of the biggest vehicle manufacturers in the world.

Paulo Butori, president of Sindipeças, is also ha-ppy with the measures. “We support and celebrate any government action that values the locally ins-talled industry in Brazil and softens the effects of the economic policies that take away our competi-tiveness from one day to the next, without allowing us to react. We have a vocation to produce, and we want to continue alive.”

Local content. Among the principal mea-sures, the government decided that the 30 percen-tage-points increase of the IPI tax on models that do not comply to the regime rules, which was expected to terminate in December of this year, will now be in effect for, at least, another fi ve years. The companies that produce here will not pay the IPI increase, as well as those who have their local production plans duly certifi ed.

The local content defi nition was also changed. The minimum regional content necessary to comply with the discount of the 30 percentage-points incre-ase in the IPI will be 55%, starting in January 2013. The base for the calculation changed, since the mini-mum local content ratio requirement today is 65%. It will be the same as the one used in Mexico and in other countries, which considers only the quantity of raw materials, parts, and components acquired in Brazil and the Mercosul that are used in the production of the vehicle.

The current calculation uses the sales price of the vehicle, which enables the inclusion of other costs that are not directly linked to its production, such as advertising and marketing

costs, and payroll. The automakers that have less than 55% local content will not be found in non--compliance. Instead, they will have a discount on the over-taxation of the IPI that is proportionately smaller.

In order to be included in the new regime, com-panies will need to comply with three of four basic requirements established by the government: an in-vestment of at least 0.15% of the company’s gross operational revenues in innovation; a minimum 0.5% of gross operational revenues invested in enginee-ring and basic industrial technology; have at least 25% of its vehicles with Inmetro seals of complian-ce that certify pollutant emission levels; and, also comply with the new manufacturing standards ac-cording to the segments, light vehicles and heavy vehicles.

The new local content calculation includes only raw materials, parts and components used in the production of vehicles in Brazil and the Mercosul, and will be the same as the one used in Mexico

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The manufacturers of light vehicles now need to comply with eight of the 12 phases, while the hea-vy vehicles manufacturers need to comply with 10 of the 14 phases for the segment. Each vehicle ma-nufacturer will have until December 31 to comply with these new rules and, consequently, renew its certification. They will also have four additional ye-ars to continue to develop their operations in order to meet other standards beginning in 2017: invest-ments in research and development will be increased to 0.5% of the gross operational revenues, the engi-neering and basic industrial technology investments will be increased to 1% of the same revenues, and the production phases will increase to 10 in the li-ght segment, and 12 in the heavy vehicles segment, and, finally, 100% of the vehicles sold in the country should have the Inmetro certification seal.

New entrants. Companies that are cur-rently building their manufacturing facility or that present investment projects for Brazil, will fall under special transition rules valid for up to three years. Only 60% of the demand for those that have already been certified will need to be met by the new manu-facturers in order to be able to receive the discount on the increased IPI tax at the start of the operation. They will also receive an import quota for the period, which has not yet been defined.

The increased IPI tax collected by the govern-ment on vehicles sold by these companies during the period in which their factories are being built, will generate a tax credit for use after production begins. With this, the government avoided a repe-at of the Asia Motors case. At the end of the 90s,

the company announced the construction of a plant, imported models with tax discounts, cancelled the project before going into operation, and ended up owing taxes to the government.

Payroll. An old request by the Brazilian industry, the lower payroll burden was part of the incentives package for local production announced by the go-vernment in early April. The measure was applied to-wards 15 different sectors, among them, automotive parts and bus manufacturers. The plastics industry, which supplies to the vehicle manufacturers, was also benefited.

The measure stipulates that companies in these sectors can be relieved from paying the 20% Social Security tax on the payroll and substitute it by a 1% to 2.5% tax on revenues, with the exception of revenues generated through exports.

In the automotive parts sector, this rate will be

The government complied with an old demand from

the private sector and lessened the burden on

the payroll. It benefited 15 productive sectors, such as automotive parts and

bus manufacturers.

19 April 2012

1%, which represents estimated savings to the ma-nufacturers of R$ 77 million, according to the go-vernment calculations, which believes that, in this case, the applied rate would be equivalent to 1.72%.

The automotive parts manufacturers were allo-wed to pay the April and May PIS and Cofins in No-vember and December of this year. The government’s objective was to enable more cash flow for invest-ments in production.

Other general measures should benefit the local automotive industry, albeit indirectly, such as prio-rity for acquisition of goods and services produced in the country with a margin of preference of up to 25% when compared to imported products. Streng-thening commercial defense through increased con-trol at the parts was considered another indirect benefit to the industry.

The government, in addition, wants to put an end to the state fiscal war by approving resolution 72/2010, which reduces the interstate ICMS tax ap-plied on imported goods. The objective is to elimina-te the distortions that favor imported products.

On the same day the package of incentives was announced, the first meeting of the new sector competitiveness committees took place, under the auspices of the president of the Republic. The auto-motive committee, in practice, will attempt to relive the sector chamber of the 90s. The committee will be coordinated by Paulo Sérgio Coelho Bedran, from the ministry of development, industry, and foreign trade. The vice-coordinator of the committee is Ha-roldo Fialho, from the BNDES.

Loan. The national treasury will transfer R$ 45 billion to the BNDES for use in loans to the produc-tive sector. The resource, baptized as the PSI 4 credit line, represents the fourth version of the investment sustainability program created in 2009. When com-pared to the PSI 3, the latest version has been incre-ased by R$ 6.5 billion.

With direct respect to the automotive sector, the biggest news is in the credit line destined for sales of locally produced trucks and buses. The fixed interest rate was reduced from 10% to 7.7% per year. The maximum financing period was extended from 96 to 120 months.

The BNDES also chose to broaden the maximum participation of the PSI line for vehicle acquisitions.

In order to eliminate distortions generated by fiscal wars between the states, the government

pretends to reduce the interstate ICMS on

imported products

1%, which translates into the government renoun-cing an annual revenue estimated at R$ 1.1 billion - according to the official calculation, the pure and simple offset of a tax by another one would repre-sent a rate of 2.19%.

The bus segment will also have the same rate of

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Micro, small, and medium enterprises will be able to use up to 100% of the credit line. Previously, the limit was 80%. In the case of the big companies, the limit was increased from 70% to up to 90%.

The Procaminhoneiro credit line created for in-dependent truckers, was also contemplated. Now, the interest rates dropped to 5.5% per year, which, in practice, translates into almost 0% interest rate, discounting inflation. Previously, the interest rate was 7% per year. Hybrid buses will continue to be eligible for a special credit line from the BNDES, with an interest rate of 5% per year. All of these changes will be effective up to December 2013.

The expected 10% drop in the sales of bus chas-sis this year was modified with the announcement of the package, according to the president of Fabus and Simefre, José Antônio Fernandes Martins. “The local bus market will recover starting now.”

Exports. The federal government implemen-ted improvements in the PSI credit lines destined for export programs. The Revitaliza credit line, destined to support those sectors the government believes are the ones most affected by the exchange rate va-luation, including parts and accessories for vehicles, will receive R $4.7 billion at fixed interest rates of 9% per year. The payback period was extended from 18 months to up to 24 months.

The fixed 9% per year interest rate for pre-ship-ment of exports by big companies was maintained, while the micro, and small companies can access this credit line and pay an annual interest rate of 7%. In this case, however, the financing limit incre-ased from 90% to 100%. The total financing period

increased from 24 months to 36 months.The Progeren credit line is available for the au-

tomotive parts manufacturers. Previously used to finance working capital for small and medium com-panies, this credit line is now being made available to big companies - those with gross operational re-venues of more than R$ 300 million. The credit line received an injection of R$ 10 billion, resulting in a total of R$ 15 billion. Interest rates went from be-tween 10.5% and 13%, to between 9% and 11.5% per year.

The BNDES also created a new sub-program called Projetos Transformadores (Transforming Pro-jects). Composed of R$ 8 billion, it will be used to finance projects related to technological capacity building and production of goods still not manufac-tured in the country. The line’s interest rate is 5% per year, with a total payback period of up to 144 months, and a grace period of up to 48 months.

Credit lines used to acquire capital goods such as machinery and equipment for production also be-long to the other categories. In this case, companies in all sizes will have access to reduced fixed interest rates that have been dropped from 8.7% to 7.3% per year, and from 6.5% to 5.5% per year. The total payback period was maintained in 120 months.

The fixed interest rate and lines used for inno-vation will remain in 4% per year not only for loans destined for investments in technological innova-tion, as before, but also for the sub-categories inno-vative capital and production innovation. The grace period was increased from 36 months to 48 months, and the interest rate in the sub-category Proenge-nharia dropped from 7% to 6.5% per year.

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sales stableThe market shrank 0.8%, putting a stop to the growth process of

the last years. The economic package, however, will favor recovery.

Text AutoData Newsdesk .redacaoad@autodata.com.br

The new Brazilian automotive regime arrives in a good moment for the industry. Af-ter years of continuous growth, the sector began 2012 without registering a positive performance when compared to the previous year. Sales during the first quarter totaled 818.3 thousand vehicles, with a slight drop of 0.8% when compared to the same period last year. In the case of locally produ-ced vehicles, there was a drop of 3.9%, that is, 618.3 thousand units against 643.2 thousand units. Sales of imported vehicles registered an increase of 10%, growing from 182,000 to 200,000 units.

In the light vehicles segment, there was a drop of 0.7%, totaling almost 772.3 thousand units sold this year. Fiat continues to be the sales leader, followed by Volkswagen and General Motors. Despite the quar-ter results, the president of Anfavea, Cledorvino Be-lini, showed optimism about the future of the sector. “With the announcement of the incentive package for local production, the domestic market scenario is one of recovery.”This is why we are keeping our growth projections between 4% and 5% in 2012.” The execu-tive pointed to economic factors such as the drop in interest rates, better financing conditions, and a gro-wing consumer confidence ratio to justify his analy-sis. In addition, he mentioned another positive factor registered in March, prior to the announcement of the new automotive regime: vehicle inventory at the ma-nufacturers and dealers dropped from the equivalent of 38 days to 35 days of sales. At the dealers, vehicle inventory dropped from 28 to 25 days, and, at the manufacturers, they were maintained at 10 days.

The sector’s total production volume of automobi-les, light commercial vehicles, trucks, and buses, tota-led 738.1 thousand units during the first three months of the year, a drop of 10.9% when compared to the

same period last year. Production volume in March, however, registered an increase when compared to the same month in 2011 and February of this year. The sector registered export revenues of US$ 3.7 billion during the first quarter of the year, representing an increase of 13.2% when compared to the first quarter of 2011. Foreign sales totaled almost US $1.4 billion in March, consolidating growth in this area for the past three consecutive months.

Manufacturer 1st/qtr2012 1st/qtr2011 Change ShareTotal 772 283 777 671 -0,7%

1º Fiat 173 527 171 999 0,9% 22,5%

2º Volkswagen 159 774 167 020 -4,3% 20,7%

3º GM 136 771 142 741 -4,2% 17,7%

4º Ford 72 619 74 274 -2,2% 9,4%

5º Renault 52 317 38 331 36,5% 6,8%

6º Nissan 27 299 13 380 104,0% 3,5%

7º Honda 23 207 27 786 -16,5% 3,0%

8º Hyundai 21 507 25 089 -14,3% 2,8%

9º Toyota 21 170 22 018 -3,9% 2,7%

10º Citroën 16 437 22 369 -26,5% 2,1%

Ranking vehicles

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People in the line moveAlthough secondary in the plans of many companies, a succession policy is an instrument that can guarantee a healthy future for the companies

Text Décio Costa . decio@autodata.com.br

On track to achieve the objective of becoming one of the five major manufacturers of road implements in the world, soon to reach twice its size by 2015, Randon has changed its command structure. New members have joined the board and the company has become less family run and more professional. Three sons of the company’s founder, Raul Randon, are still there, but now, five additional executives are also participating in the company’s decision-making process. The changes represent a frequently forgotten homework in the mana-gement of companies because succession is usually left for afterwards, in the majority of the cases.

A study conducted by Korn/Ferry international in the US, with 1318 executives from 60 countries showed that only 35% of the companies in the world possess succession plans for their presidents and executives. In Brazil, this ratio drops to 26%. In the study, however, practically everyone inter-viewed, 98%, believes that planning the succession is an important part of the process that leads to corporate governance.

The challenge of maintaining the continued growth of the assets is not an issue to be taken lightly. According to figures from Sebrae, the Bra-zilian service for micro and small companies, only 30% of the companies survive up to the second

generation, 19% up to the third, and only 5% up to the fourth generation. According to Prof. René Werner, from Werner and Associados, “The vision of the future implies the elaboration of a multi-managerial strategic plan. This is an essential process that must be led, elabo-rated, and executed.”

Around five years ago, the command of Volvo Construction and Equipment in Brazil concluded that five of the company’s senior executives were close to retirement, and all had similar ages. That finding marked the beginning of a succession pro-gram and each of the professionals involved nee-ded to think about who they would like to see in

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their position, as well as what they would do after their professional cycle

in the company had ended.“There is a very significant risk of substituting an

entire senior management at once,” stated Yoshio Kawakami, president of Volvo CE. “Naturally, the candidates for succession need training and must absorb more experience for the responsibilities that will be cast upon them,” he added.

The succession policies vary between compa-nies. In the case of Volvo CE in Brazil, the chosen

candidate takes on different positions in order to acquire diversified knowledge so that he/she can take over the business within an adequate period. However, there may be detours along the way. The company is not immune to losing the professional to the market as a result of a new job proposal, or even his/her death. “The important thing is to pre-pare people to retire and not depend on one name for the succession.”

From the five executives at Volvo CE, two will leave the company with plans of opening their own business, one has left to occupy a position in Ar-gentina within the company’s subsidiary, and the other two have already left the company. Kawaka-mi is one of these professionals, and he is preparing his substitute. Although he is driving the succes-sion program, the president of the construction machinery and equipment manufacturer insists that a lack of planning for succession is a reality in a number of corporations. “The issue is almost always treated in an improvised manner.”

The theme generates a certain discomfort wi-thin the corporate environment since, after all, the end of a professional’s cycle in the company is being decided. To the Schaeffler Group, however, this represents a paradigm. In the company’s case, there is a specific routine Every year, the employees undergo a sort of evaluation composed of a frank conversation with their immediate bosses where one of the objectives is to ensure that the senior manager will, in the least, have a few names to suc-ceed him/her.

The EDD program, Employee Dialogue Develop-ment, was created based on a performance dialo-gue leading to the creation and growth of a bank of talents for the company to fulfill regional and global needs.

“The EDD is different than a career plan. It cre-ates the opportunity for an employee to prepare for well beyond the simple effort based on results for a possible promotion,” says Marcel Oliveira, vice pre-sident of human resources, communications, and corporate relations of the group for South America. “The person must be prepared for the succession. It must be a professional who has collected knowled-ge, not only in his/her area.”

According to Oliveira, the approach must be low-key and never reveal that a determined em-ployee is a candidate for the succession of a spe-cific position in the company. “The name is always evaluated by a council, which can disagree with the one initially proposed for the succession. Eventu-ally, the succession may involve a professional from outside the company.”

Within the Schaeffler Group succession policy, the employee in a managerial function must have a

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talented name prepared to succeed him/her in the short run, since life is made of possibilities. “The employee in a key position must always have in mind his/her succession and, if the names of the talents have already been thought of, he/she should train them for it. “It is part of the game, since suc-cession is a natural process and it does a lot of good to the business. However, instead of thinking the company plans to put the senior manager aside, what needs to be shown are the benefi ts that even an eventual retirement can provide.”

The lack of succession planning is a reality in a majority of the companies. The issue is almost always treated in an improvised manner and ge-nerates a lot of discomfort in the corporate envi-ronment

Leaders in training

With an eye on possible successions, but also with the objective of preparing people to become leaders, the Schaeffl er Group created a managerial development program for its employees. Known as Schaeffl er Generation, it began in July 2010 and has already formed two groups of more than 70 professionals. Currently, the employees are already qualifi ed and are taking part of a phase in which they will obtain an MBA in Management degree since there is a partnership between the company and the Sorocaba campus of Universidade Paulista. The program is composed of 12 modules with a total of 172 hours. Company specialists teach the classes. “The company already has at least 70 people capable of moving up the hierarchical ladder,” says Marcel Oliveira, vice president of human resources, communications, and cor-porate relations of the group for Latin America. A third group of 15 supervisors is currently participating in the program. The idea is to create groups to take on chief and management positions. “The Schaeffl er generation program drawings the development of persons with the development of the company itself.

Legenda

The lack of succession planning is in reality in

most companies, and the question is almost

always treated very improvised and generates a lot of discomfort in the

corporate environment

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From beginning

to endAutoData, in a brand-new

interview format, places the presidents of the three major automotive associations in a

head-to-head debate

Text AutoData Newsdesk . redacaoad@autodata.com.br

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27 April 2012

Debate

In order to kick off the celebrations of its 20th anniversary, AutoData gathered the main leaders of the automotive sector for a two-hour chat to discuss a number of issues affecting the industry, from the global platform to direct sales. Paulo Butori, president of Sindipeças, Cledorvino Belini, president of Anfavea, and Flávio Meneghetti, president of Fenabrave, took part in this challenging debate. Belini, sometime in the debate, stated that some issues in the automotive chain involve “an eternal war.” However, the conclusion of the meeting that was held at the headquarters of the Brazilian machinery and equipment industry association, Abimaq, was also clear and can be summarized in Paulo Butori’s words. “We are here with three leaders of the chain. If one end doesn’t work, none of the others will.” As stated by Meneghetti, the market is mature enough to enable a dialogue between the players who are involved in a search for solutions that will bene� t everyone.

Debate

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AutoData - Sales of 6 million vehicles per year are being estimated for the near future in Brazil. Is this volume achievable?

Cledorvino Belini - Brazil offers all of the potential necessary for the sector to grow. We have one passenger vehicle for every 6/7 inhabitants, social mobility, and an increase in the population aged 18 and over. Studies reveal that by 2020 we can have a market of 6 million (vehicles). Clearly, this depends on a number of factors, including the GDP average growth of 4% to 5% per year and the maintenance of the current credit level, which is close to 50% of the GDP, today. These are conditioning factors, but the potential exists. This is why the industry is investing US$ 22 billion by 2015.

What about production? Will it reach 6 million vehicles?

Belini - I would like that to happen, but, in reality, what we need throughout these years is to � nd our competitiveness again so that we will not need to import and achieve a balance with exports.

In this sense, do the bilateral trade agreements such as the ones between Mexico and Mercosul help?

Belini - All of the bilateral trade agreements help. Currently, the problem is related to the exchange rate unbalance. When countries with a very aggressive monetary policy devalue their currencies and our currency increases in value, there is a complete unbalance in this � eld. This is an equation that needs to be solved.

When will our production volume achieve 6 million vehicles?

Belini - It is dif� cult to say. We have at least eight years of intense work ahead of us in order to put our competitiveness in order. As a matter of fact, perhaps it is even more than that. Not even a crystal ball can supply a precise estimate.

Is the supply base prepared for a market of 6

million vehicles?Paulo Butori - I believe that unless we have an industrial policy, imports will tend to grow. The Brazilian government has very strong structural programs and, with this, it needs to capture money to � nance itself, therefore paying high interest rates. Since there is an excess of resources that do not have where to be applied, it goes where there is more money. This is the � rst time that we see the real increase in value when compared to the other currencies. I usually refer to what Herbert Demel said about the Volkswagen plant in 2002. At the time, he was president of the vehicle manufacturer and he said it was the company’s most productive facility in the world. The exchange rate at the time was R$ 3.92. Today, if we ask Thomas Schmall, the current president of Volkswagen, if after 10 years of investments and changes there, he would say it is the least productive. That is, the exchange rate is a preponderant factor in competitiveness.

What is needed to gain competitiveness?Butori - I think many things need to be done, such as the formation of people. Unfortunately, we form a lot less technicians and engineers than the other countries in the Bric. Perhaps, the quality of our people is better, but postgraduate courses done abroad qualify the people better. The Brazilian government needs

29 April 2012

Debate

to say if it wants an automotive parts industry. We are currently facing many dif� culties. We have pressure from raw materials and from the vehicle manufacturers. We understand that if we were on the side of one or the other perhaps we would also have the same behavior. However, our sector is strangled and needs assistance. If this doesn’t happen, we will start to import and distribute. In a broader sense, I see growth up to 2020 and, as Belini stated, our share in this growth depends on what the government wants to do with the automotive parts sector in Brazil.

Recently automotive parts companies followed new vehicle manufacturers into Brazil...

Butori - Today, we project a de� cit of more than US$ 6 billion in the automotive parts industry’s foreign trade balance. In 2006, the balance registered a surplus of US$ 2 billion. This does not happen only in our sector. It happens in this house, Abimaq. As I usually say, those who are arriving will see how dif� cult it is to produce here. They will see what the Brazil cost is about. This is why I am not afraid of international competition. When they sit their bums on the chair and start to see how the shop is, they will see how different things are. They will see how cheap and low quality imported parts arrive, which we are trying to solve with the Inmetro through quality standards.

Production or sales targets depend on retail.

What are Fenabrave’s projections?Meneghetti - Our economic department is a little more conservative. In order to reach 6 million vehicles in 2018, the GDP would have to grow at a rhythm of 7% per year. Our estimate for 2012, which was a 4.5% GDP growth, has been revised down to 3.5%. We are pessimistic with the international scenario and its impact in Brazil. The country, however, has potential. If our government implements the necessary reforms, we will be capable of reaching 6 million units. Given the favorable scenario of the past � ve years, when we doubled the market, we could do it again.

Has the pro� le of the Brazilian consumer changed?

Meneghetti - The Brazilian consumer learned how to acquire a more sophisticated product. He travels more, rents cars, and ends up having contact with the products out there. He sees the prices and also notes that he can purchase something better and cheaper. The cars that come from Mexico have higher value-added and are priced more attractively because the cost structure in that country is different than ours. I am disappointed to see that the problem here is treated lightly, without the measures that could reduce the Brazil cost. All of this must be corrected in order to be able to reach 6 million vehicles. The dealership network has the competence and capillarity to move this production through to the consumer.

We are only talking about the production in Brazil, without involving the Mercosul, which used to be common practice. Could you tell us why?

Belini - Mercosul is a reality, as well as the partnership between Brazil and Argentina, which involves complementary production and markets. There are some anomalies and trade unbalances. The relations of the Mercosul have always had extreme highs

There are limitations, but the potential factors for the market to reach 6 million cars per year exist. This is why the industry is investing US$ 22 million by 2014, 2015.C. Belini

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and lows. The projection of 6 million vehicles relates to Brazil. Honestly, we did not make an evaluation of the other side. However, what I have is a base of 1 million vehicles in Argentina, representing a total of 7 million units.Butori - I disagree a little bit with Belini because I don’t like the word Mercosul for the automotive sector. It does not exist. We are not inserted in the Mercosul. What we have are bilateral agreements.

How is the relationship with Argentina?Butori - We have a very high rate of insecurity regarding the government in Argentina. It appears there is a secretary over there that thinks he owns the world. I discussed this during a lunch with the people from the Argentinean embassy and they said that I could not speak that way about the secretary because I would be punished. I said that I do not like the Argentinean, I do not have any relatives there, I am complying with what was agreed and signed, and that I am not afraid of any secretary. We have to pay US$ 18 billion in July. We need to have the reserves for this payment to occur. Why can’t we negotiate with our own currencies? Why can’t we pay in reais and receive in pesos? As a matter of fact, this is a good idea that we need to tell the secretary. The Argentineans are not taking into consideration the size of the markets.

What would you propose?

Butori - Since our market is four times bigger than the one in Argentina, we have a different production scale. They want us to stop exporting to them. That can’t be done because 65% of our de� cit is caused by the vehicle manufacturer that purchases here, sends it there, produces the car, and ships it here. This must be understood. They asked why we do not buy their wine or soybeans. I can understand that they have this credit in the foreign trade balance, but it is not our business. In 2011, we shipped 406,000 cars to the country, while they shipped 408,000 cars to us. I do not know what Argentina would be like without our market.Belini - The reality is that the industry in Argentina goes well when the one in Brazil also goes well. If, by chance, the Brazilian market drops, Argentina will suffer.Meneghetti - When we sneeze, they catch pneumonia.Belini - Exactly.

How will the Brazilian automotive parts industry participate in the global platform process?

Butori - Today, as I mentioned, it is not favorable. Brazil has a problem that dates back to the beginning of the automobile industry: a lack of incentives, or lack of businesspersons that would do what the Koreans or Chinese did. They created their own brands and a nucleus of suppliers interested in this

31 April 2012

Debate

development. We have to wait for the effects from the economic package divulged by the government to see whether we will be able to participate in global platforms.

But the products will be produced here...Butori - There are only a few companies with a nucleus of suppliers located next to the plant, such as Fiat, which launch models that are genuinely Brazilian. Volkswagen has a different model since the pen, the one that signs the project, is located out there. There are rare exceptions of models that are signed here. As a result, our genuine Brazilian companies are not considered global partners of the vehicle manufacturer and do not participate in the bids that generate global scales.Belini - The issue of globalized platforms is a natural trend. Brazil is trailing this route. The newcomers arrive with global platforms. Traditional companies here are migrating, but this will not happen from day to night. It will undergo the process mentioned by Paulo. I believe there is room for alliances within the automotive parts sector that can strengthen the Brazilian industry as a whole, as local content ratios increase and more investments are made in innovation. Brazil has an advantage. A bumper can have the same design, but the contents of the raw material can be different, one can be made with coconut � ber......Butori - I would only like to make one thing clear. As Belini and I stated, the global platforms will be disseminated throughout the entire world in the coming years. What I understood from the question is whether the present suppliers will participate in these platforms. They will only participate if they are invited to bid, something that I think will rarely happen. As for Bellini’s suggestion of partnership, for later supply of the same product that has been certi� ed to the market, then yes, I do believe it is possible.

Where does Fenabrave stand in relation to the

global cars?Meneghetti - The platform is the most expensive item in the cost of the development of a new model. Scale is fundamental in order to achieve a competitive cost. I believe it is dif� cult for us to begin a platform from scratch, since we do not have the expertise for this. Obviously, on top of this, we have already made some advances. Fiat itself launched a car that has a platform that is used in other models, and enables economies of scale and more accessible prices.

Has the Brazilian consumer become more demanding?

Meneghetti - Certainly. Three or four years ago, the 1.0 L car represented 60% to 65% of the market. Today, in the retail area, it accounts for 35% of the total. This means that the consumption power has migrated. As the middle class rises, the consumer has learned to like a more sophisticated product, equipped with more items, which bene� ts the automotive parts producers. Those days of a car without air conditioning, power steering, electric locks, luggage compartment opener, and alarm are over.

Does the consumer expect to pay more for these items?

Meneghetti - Every time there is talk about adding value, there is also talk about readjusting prices. When this happens, the banks’ � lters increase. Therefore, while there is a desire to have a car with higher value-added, there is no room for increases. Higher prices make it dif� cult to access � nancing, which, in the entry-level segment, is already a problem due to the high default rate.

Butori mentions Brazilian companies. Is he talking about locally owned companies or those that are established in the country? Is it not important that Korean companies, for example, invest here?

Butori - This is what happens: the Korean

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company injects capital here. It may establish a joint venture, but it will be limited to Brazil and Argentina. What I am saying is that, in the past - and I am sorry this happened - we never had anyone here who, like Embraer, created the Brazilian automotive industry. If we had, we would also be big in this area.Meneghetti - Gurgel tried....Butori - But poor Gurgel, nobody put money behind him. I doubt that a local company can show enough con� dence to the point of receiving international capital and establishing subsidiaries abroad. Sabó adventured down that route but it is encountering dif� culties nowadays.Meneghetti - Correct me if I am wrong. I understand that the platform is an item that is born within the industry. It develops a concept and searches for suppliers later.Butori - Not always.Belini - It depends. The development starts in design stage, but there are two basic things. One refers to the lower part of the car, the chassis, the platform, the suspension, the powertrain, and the transmission. This set is usually basic. Later, there is the skin of the automobile and the internal � nishing, which basically depends on the vehicle manufacturer, which uses its own criteria, and can be done internally or outsourced. The majority perform the platform part internally, with the exception of the suspension, an item that suppliers develop. In the case of seating, which varies from one car to the other, the structure is always the same because it is an issue related to the platform, and then they are done by outside suppliers. Then, the sub-suppliers come in: seats, foam, etc.Butori - But doesn’t the trend call for the vehicle manufacturer to increasingly use its brand, that is, pay for the entire development, and later outsource it?Belini - There is a fundamental issue that relates to competence. Clearly, it is possible to do a panel door. However, in the cases of the powertrain and suspension, it is impossible.

Butori - In a way, the powertrain is already outsourced by the vehicle manufacturers .... Belini - No.Butori - Of course it is. The powertrain is not always produced here. It is done abroad and shipped here.Belini - Yes, but its basic development is done here: different feel, different temperatures, and so on.Butori - But, will the platform of the future be designed by the vehicle manufacturer? I think it will be outsourced. I believe that the vehicle manufacturer will increasingly, with the activities of the systems suppliers, reduce the number of suppliers, the purchasing structure and, as a result, save tons of money. A good part of the purchasing business has been transferred to the systems suppliers, who will become as big as the vehicle manufacturers.

The global platforms belong to more sophisticated cars that have more content and, ultimately, are more expensive. Are the dealers ready to sell vehicles that are more expensive?

Meneghetti - Undoubtedly. The Internet is a phenomenon and if the internal team is not prepared it runs the risk of becoming less informed than the customer. My concern relates to the price. The cost must be compatible with the purchasing power. I participated in the launch of the Siena, which has increased content and price. However, as stated before, the Brazilian is learning to consume more sophisticated products equipped with ABS, airbags, and the like. In this case, the safety culture must be a part of the salespersons competence. Investment in training is needed. The professionals we currently have in the market are formed by the school of life. The salesperson becomes the manager, the mechanic turns into the chief of the shop.

What about direct sales? Some dealers today say it is better to have a rental car company than a dealership. Is that true?

Meneghetti - In a certain way, yes. The rental

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Debate

car companies are not the problem. Direct sales, as a whole, are the main problem. In reality, a new distribution channel is being created through this instrument and, as a representative of the dealers, I plan to talk to the presidents of the vehicle manufacturers who work more strongly with this segment. I see the � eet owners as important customers, one of our partners. As a dealer, I just want to have the same type of treatment. We are not against the direct sales,. All we want is to be treated compatibly. Any vehicle manufacturer in Brazil, in order to be successful, needs a strong dealer network. And, in order to have a strong dealer network, the direct sales channel must be re-evaluated. I believe the market is mature for this type of dialogue between the players, who should � nd a solution that it is reasonable to the segment.

Have there been any changes in this area in the world by the vehicle manufacturers?

Belini - I believe there are sales that are good for the dealer network, since they do not have inventory or working capital. The plant delivers and the dealers receive their commissions. There are predatory sales, those in which certain � eet owners buy and sell before a reasonable time period. I think this is

an area that needs to be regulated. Anfavea is available. We have already talked to Flávio about this and we want to solve it.Meneghetti - So you can have an idea, 12% of these vehicles are back in the market after less than one year of use. This ended up turning into a new business for the pseudo-rental owners and pseudo-� eet owners, which end up bene� ting from this channel and creating unfair competition since they do not pay the state ICMS taxes, which we do.Belini - That is the real problem.

Let’s talk a little about the cost of parts in the aftermarket...

Butori - There is no solution for that. As much as we try, the pro� ts that automotive parts companies register in the aftermarket will be increasingly lower, as governments are taxing more. Today, we are discussing a value-added margin on direct sales of auto parts - that is, from the manufacturer directly to the market - of 80%. It’s tough. At the vehicle manufacturer a 36.3% margin was decided, that is, twice. This is why it is dif� cult for us to participate in the aftermarket. We have told this to the Minister of Finance.Meneghetti - Once again, the problem relates to competitiveness. Butori - Dealers, vehicle manufacturers, and automotive parts employ almost 1 million

Since our genuinely Brazilian companies are not considered global partners of the vehicle manufacturers, they do not participate in the bids that generate global scale. Paulo Butori

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people. If we break this chain, I don’t know what it will look like. Raise the wall of your house because things are getting worse.

Would Belini like to talk about this?Belini - This is an eternal � ght. My advantage is that I have already been on the other side. Brazil has developed a very organized distribution chain and ef� cient automotive parts chain, with big distributors. There are 150 distributors that tend directly to 70,000 points of sale, garages, and dealers. The reality is that automotive parts companies are not capable of providing national coverage. Another important issue is that the vehicle manufacturers account for 25% of the total consumption of automotive parts, with the remaining 75% in the hands of independent distributors. The automotive parts manufacturers produce to the vehicle manufacturers and the distributors. They are the ones that have logistics and customer care systems that provide national coverage. This is the model that exists in Brazil. In reality, we represent the smallest piece in this cake.Butori - But the question hasn’t been answered. How will we solve this? You have 25% and 75% is in the hands of the distributor. If we are taxed based on 80%, and this is added to the price, this distributor will no longer be competitive. And we know what types of margins are practiced by the vehicle manufacturers. And now what?Belini - Without a doubt, the 80% (ratio) is outside of the logic. But this is still a discussion. They want to tax all of the phases of the system at the source.

Is there room for more brands to be active in Brazil? Does the arrival of the new companies contribute to improving the quality of vehicles that are produced here?

Belini - Increased competition attracts development and progress. The only inconvenient I see is that when you pulverize production too much without having a

market, production scale of platforms drops and, instead of increasing ef� ciency, this creates inef� ciencies and higher costs throughout the entire system. If the market increases, undoubtedly, there is room for everybody.Butori - It’s the so-called gains from scale. I believe that even if we reach the 6 million units mark, there will be many brands in the market and many of them will break along the way. Those that work better and have a strong distribution network will remain. Here we are, with three leaders of the chain, and if that point does not work, mine and no other one will work. But the dealer is the one that has the say. If there is growth in the market and the distribution is good, perfect, this brand will move ahead. I am not generalizing, but

Since our genuinely Brazilian companies are

not considered global partners of the vehicle

manufacturers, they do not participate in the bids that generate global scale.

Flávio Meneghetti

35 April 2012

Debate

I see some Chinese companies that are only interested in selling and are not investing in customer care.Meneghetti - Their margins are even bigger because very little is demanded from them. I remember that four years ago, at NADA in the US, the Chinese showed up to present themselves to the market. I saw negotiations between companies that acquired a dealership right but I did not see their projects evolve from paper. You do not see the Chinese in the US. Many of these companies came here, although I do not know the Chinese market, they don’t appear to be big sellers in that country.Butori - Chery is a big manufacturer....Meneghetti - Because the big players are those linked to the international companies. Therefore, I think they are adventuring themselves.Butori - Chery does not have a limit for investment. The Chinese government backs it up. It is really strong. Chery has made a joint venture with Land Rover and Jaguar, models that have good sales volume over there. It is a market of 17 million units. They all need to be big, but there are also 110 brands in the country.Meneghetti - But, when they sit in the chair here, reality will change.

Does the fact that 75% of the automotive parts business resides in the hands of the distributors, represent a risk? Is this not

dangerous?Belini - They need everyone. If they do not acquire an automotive part, they will not be able to meet customer demand.Butori - There are many brands offered, including those from the OEM.

At the dealers, though, they are more expensive....

Butori - In reality, I am not sure whether the price at the dealer is always more expensive. There are interesting promotions nowadays.Meneghetti - It is not as it used to be in the past. As a dealer, if we acquire from the market, or the vehicle manufacturer, we are buying almost at the same prices. There is however, a considerable amount of informality, overvalued invoices.Butori -This happens with imported parts. Our sales, however, are taxed at the source.Meneghetti - Do you have any idea how many imported parts end up in the aftermarket?Butori - It’s signi� cant. I would tell you that it is around US$ 500 million in imports.Meneghetti - How much does this represent?Butori - 10%.Meneghetti - That’s a lot.Butori - Yes, but it’s the purchase of an imported product that is already being imported at an extremely favorable exchange rate. So, it’s complicated.

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36 April 2012

In the Swiss cold, a bet on emotionThe event showed not only dream cars but also the

compact vehicles that will arrive in the market to renew the hope of better days for the European industry

Text Fred Carvalho, from Geneva, Switzerland . fred@autodata.com.br

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In times of bad news, such as economic adjustments in Europe that end up reducing consumption and knock down vehicle sales - forecasts estimate 12.8 million vehicles will be sold in 2012 when compared to 13.6 million units in 2011, which, despite being consi-dered a good year, closed almost 4 million units below the record reached in 2007 - the strate-gy of the automobile industry earlier in the year was to bet on emotion generated by the new models in exhibition at the Geneva Auto Show in order to motivate the hesitant consumers.

Right in the middle of the European winter, the 110,000 m² Palexpo set of exhibition pavilions next to the Geneva airport, opened its doors between March 8 and 18 for more than 100 novelties. The range of products was extensive, such as the Ferrari F12, the most powerful in history, with 740 HP and 690 Nm of torque - with an estimated price of € 270,000 - and the really small electric vehicles ga-thered inside the green pavilion of the show.

After all, in a time of crisis, appealing only to emotion is not enough. It is also important to streng-then the ecological appeal. Despite the temporary paralyses of production of the Volt electric car, and the irony of Car of the Year, always announced du-ring the event, falling in the lap of the Ampère, from Opel, a brother of the Volt, also without any com-mercial success.

Senior executives from the European automakers are very concerned. The retrenched consumers and the possibility of a signi� cant increase in invento-

ries, as well as the added capacity at the major ma-nufacturing facilities in the continent are examples of this concern. In addition, they are trying to digest the recent disappearance of Saab, in Sweden, as well as GM’s participation in PSA’s equity in France, whi-ch owns the Peugeot and Citroën brands. The fear of registering increased losses, such as occurred with some brands in the past year, is also growing.

Visitors were able to see the roadster version of the Lamborghini Aventador and the limited-edition Zagato V12. The Porsche a� cionados admired the new generation of the Boxster and a Panamera equi-pped with a diesel engine.

Bertone, from Italy, took advantage of the event to celebrate the 100th anniversary of its founder, Nuccio Bertone, with a concept called Nuccio - a modern re-reading of the Stratus Zero from 1970.

To buy. Setting the consumer dreams aside, the models that will really sell in large scale are the

Peugeot exhibited the new generation of the 208, and it showed the 500 L, a bigger version of the smaller model, below

Image Courtesy/Peugeot

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new Up! line from Volkswagen, which presented a number of new versions; the Swiss, Winter, the X and the Cargo, as well as the concept Cross Coupé, perhaps the successor of the Tiguan starting in 2015. Some specialists believe that this may turn out to be a strong competitor of the Land Rover Evoque.

Another model that called attention, especially because of its fundamental importance to its ma-nufacturer, was the Peugeot 208. The company had to discover how to continue the design that began with the 206 and later extended itself successfully throughout the line.

The car has a futuristic style that has evidently evolved from the lines. The new car can please the European consumers and meet the demands from a public that prefers cars that are more compact.

Mercedes-Benz used the Swiss show to exhibit its biggest bet on the rejuvenation of the brand: the new A-Class. The car is no longer a concept and has become a reality. In fact, it represents a bet on in-creased sales and, particularly, for groups of young consumers.

Under the same strategy, and platform, the B--Class, which was launched at the Frankfurt Auto Show in Germany last year was also in exhibition. In addition to the novelties, the company also exhibi-ted its classics such as the E-Class hybrid, and the SL 63 AMG sports.

Varied brands. Fiat set up a number of posts for each of its brands: Fiat, Lancia, Ferrari, Ma-serati, and Alfa Romeo. The Ferrari booth attracted the majority of the public during the event. Crowds would gather in the morning in front of the booth and only dissipate at the close of the day. However, the booths from the other brands also made success, principally where the new and expanded Fiat 500 L version, full of technology and increased interior space, was exhibited.

Even if driven by ecological arguments, it was a pity to see the new Alfa Mito equipped with a TwinAir engine. After all, despite being equipped with a Turbo, the two-cylinder engine does not correspond to the

Volkswagen brought various versions of the Up! and Dacia presented the Lodgy, below

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historic sporty image, and to the famous roar of the manufacturer’s engine. However, the small motor is sensational, although it is � t more for a Lancia Ypsilon or the new generation of the Fiat Panda.

The downsizing trend was also very evident in one of Ford’s products, the new B-Max, a single volume equipped with a three-cylinder turbo 126 HP engine. The automaker also presented the new version of the Kuga, an interesting SUV presented as a concept in 2011 at the Frankfurt show.

Dacia, the Romanian brand belonging to Re-

nault, creator of the Logan, presented an interes-ting product, the single volume Lodgy. The vehicle would be successful in Brazil. It is simple, practical, and has a good internal space. Renault exhibited the redesigned Scénic and Mégane, as well as the Zoe, ready to enter the market. However, it did not take the new generation of the Clio to the show, not even in concept form.

Citroën preferred not to make waves with the C4 Aircross and the DS4 Racing. Opel, which is trying to � nd its way back to pro� t, presented the Mokka and Astra OPC. In the luxury segment, BMW highlighted its series 6 Coupé and the X6. Land Rover showed its convertible version of the Evoque, while Jaguar brought a versatile and sporty station wagon option called XF Sportbrake and Volvo exhibited the new V40. Audi exhibited two new good novelties: the RS4 station wagon and the redesigned A3.

The Japanese brought the Toyota Yaris hybrid and the FT-Bh concept. Nissan presented the Invita-tion Juke Nismo, and In� niti Emerg-e concept cars, while Honda highlighted the NSX. Brazilian race dri-ver Ayrton Senna participated in the development of the latter prior to his death. Mitsubishi presented the Outlander and Suzuki brought its G70 prototype and the Swift Range.

In summary, the Geneva Auto Show dressed it-self as a big party for those in love with automobiles and represented the hope for executives for an in-dustry that started this year considerably depressed.

In all senses.

Alfa Romeo Mito with a two-cylinder engine

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Yes, it’s a Siena!Fiat could have retired the name Siena and adopted any other

name for its new compact sedan, which has bigger dimensions

and status, and does not resemble the Palio at all

Text George Guimarães, from Santiago, Chile . gguimaraes@autodata.com.br

They have always been considered the less fortunate brothers of the Brazilian compact cars. The small sedans have usually been nothing more than the versions of the ha-tchbacks - usually launched first - with a bigger luggage compartment area. A two-volume car with the addition of a protracted rear that drives it into the three-volume category. Nothing more. Almost devoid of any charm, its mission is principally to meet demand from a more con-servative public or couples with kids especially because of the functional comfort and price.

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41 April 2012

Similar to any other model in the segment, the Fiat Siena followed this same recipe throughout its career of almost 14 years and around 813,000 units sold by 2011. The only difference from the Palio ha-tchback has been the luggage compartment. In the front, everything else was the same. You could be looking at the Siena, the Palio, or even its station wagon version, the Palio Weekend.

Fiat appears to have decided to put an end to the complex of its least expensive sedan. Proof of this can be seen at the dealers starting this month, when a new Siena, now baptized Grand Siena, is being offered for prices ranging from R$ 38.9 thousand.

The Grand name does not relate to a mere ma-rketing resource only. There is a physical justifi cation for the name. The model has increased in size when compared to all of the previous generations of the Siena, that is, only one, since it underwent the ne-cessary cosmetic upgrades throughout its 14-year life cycle. The fi rst impression is that the new car

is not a member of the same segment as its prede-cessor. In fact, it appears to belong to a segment higher up.

This phenomenon can already be observed in other models in the Brazilian market. Therefore, Fiat is now the one providing a response, not a challen-ge, unlike it did in so many other opportunities. The recipe is to have a car that is not so expensive, but that still projects its owner to another comfort and visibility status generally associated with vehicles in higher segments.

The Grand Siena was conceived on a new modu-lar platform that mixes elements adopted in other Fiat products. When compared to its predecessor, it is 134 mm longer, 53 mm higher, and the distance between axles is 137 mm longer, perhaps the most signifi cant change that should be noticed by the consumer.

Improvements in the internal dimensions trans-mit the sensation of a bigger space, above those that

With the modular platform, the model is 134 mm longer than its predecessor, guaranteeing additional comfort to its passengers

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are perceived in the segment. The luggage compart-ment has been increased by 20 liters when compared to the Siena, and now has a volume of 520 liters.

The body of the Grand Siena is completely diffe-rent from its hatchback brother. In fact, it has beco-me more sophisticated and a lot less conservative. The vehicle is the result of teamwork between the styling centers in Betim, in Brazil, and headquarters, in Turin. If Fiat were to give it any other name - Fi-renze, for example - very few consumers would be-lieve the sedan is related at all to the Palio.

Inside, although the space is quite different, this relationship is clearer principally because of the instrument panel, despite some exclusive ele-ments. Despite the manufacturer states, “All of the elements contain well treated finishing, quality ma-terials, dynamic forms, and well-worked volumes,” the new Fiat does not impress in this aspect, which is average.

Innovation. However, Fiat does innovate in the segment by offering the sky window sunroof and what it calls insert molding - in reality, finishing that divides the panel horizontally and matches the seat covers, a solution that already existed in the Uno and the imported Cinquecento.

The model deserves a good grade for the level of equipment and safety. All of its versions are factory equipped, for example, with double front airbags and ABS brakes with EBD. The list of optional equip-ment is extensive. It varies from voice controlled ra-dio CD/MP3 player and Bluetooth, USB connection, butterfly shift levers on the steering wheel, thermal windshield, side airbags, rain, parking, and daylight sensors.

The Grand Siena will be equipped with the Fire 1.4 L Evo or the E-torQ 1.6 L 16-valve flex engines. Both engines equip other Fiat models, but the Fire 1.4 L Evo brings an additional fuel matrix: the Te-trafuel option enables the vehicle to be fueled with ethanol, gasoline, pure gasoline, and natural gas. The vehicle has four versions: Attractive 1.4, Tetrafuel 1.4, Acids 1.6 16V, and the Essence Dualogic 1.6 16V. The latter is equipped with an automated shift. That is, when totally equipped, the sedan is equal to any other model in the segment above.

Lélio Ramos, commercial director at Fiat, belie-

ves the Grand Siena will represent a natural step for those consumers who have already undergone the experience of owning a brand new car, sedan or even hatchback, and now are searching for more comfort and some level of sophistication.

He also admits that, given the dimensions of the Grand Siena and its position in the price scale, the superior and more equipped versions may ste-al potential buyers of Fiat’s own Linea, the medium sedan whose least expensive version is priced abo-ve R$ 50,000. “It’s natural. This could happen with competitors and even vehicles from other segments. However, it is important to note that, in the end, our sales volume be bigger.”

If the Linea has not been a major player in its

43 April 2012

segment, Fiat is projecting a signifi cantly more am-bitious role for the Grand Siena, which will be imme-diately shipped from Betim, MG, to other countries in South America - production in Argentina should begin during the second semester of this year. The compact sedan segment has a signifi cant share of the Brazilian market, something around 19% of sales in 2011.

Sales. In 2011, 90,000 units of the Siena were li-censed in the domestic market, representing 12% of Fiat’s total sales volume. Ramos believes the sedan family could achieve a sales volume of up to 120,000 units within a four-year of sales and full production output, which should not happen in 2012.

It is worth mentioning again: the Siena family. Yes, this is because, similar to what it has been doing to all of its entry-level models since the arrival of the Palio, back in 1996, Fiat will not set the Siena aside. It will continue to produce the old body in the EL 1.0

and 1.4 versions. The old Siena Fire, however, will be discontinued.

In order to make them become more attractive and maintain the step for those who have a limi-ted purchasing power, the automaker has reduced its prices by more than R$ 2.8 thousand. The 1.0 version begins at R$ 31.2 thousand, while the 1.4 version starts at R$ 33.3 thousand. Ramos says both of them should account for 40% of sales.

While the company did not radically change the appearance of the new car, the productive and sales strategies remain the same - and followed by com-petition during the past years: a launch does not necessarily translate into the retirement of an old model. Instead, the older model complements the newer model. Despite the possibility of representing challenges at the assembly line, this has been a win-ning equation. Fiat has been the leader in sales in Brazil for the past 10 years.

The Grand Siena has its career drawn out for it in South America starting from Betim

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Cruze is nowa family

The hatchback version of the best-selling Chevrolet model

in the world was named in Brazil as the Cruze Sport6

Text Marcos Rozen, from Indaiatuba, SP . rozen@autodata.com.br

Impressive rear and profi le: it’s the Cruze hatchback.

45 April 2012

Indeed, the career of the Chevrolet Cruze, a model developed at the General Mo-tors unit in South Korea to be a global vehicle, which is also offered in the US, is a notable fact.

When the Cruze arrived in Brazil, in its sedan ver-sion, in September of 2011, it already possessed the history of being Chevrolet’s best-selling model in the world. At the time, the model was available in more than 70 countries.

In the country, it was given the mission of subs-tituting the Vectra, which had a good number of un-conditional fans. It started leaving the assembly line at the automaker’s facility in São Caetano do Sul, SP, which became one of GM’s 11 plants in the world to produce it: Australia, Kazakhstan, China, South Korea,

US, India, Russia, Vietnam, Thailand, and Venezuela.The Cruze also confirmed its legacy here. Six mon-

ths after its launch, sales are undeniably positive.According to Fenabrave, between October 2011

and March 2012, 18,565 Cruze models were sold, ex-ceeding GM’s monthly sales target of 3000 units.

In 2012, 9147 units were sold during the first quar-ter, placing it in the second position of the competiti-ve medium sedan segment in the country, behind the Toyota Corolla, which registered sales of 12,000 units during the same period. The Cruze closed ahead of the Honda Civic, Volkswagen Jetta, Renault Fluence, Nis-san Sentra, Fiat Linea, Hyundai Elantra, and Peugeot 408, in decreasing order.

During the first quarter of 2011, for comparison’s sake, 4000 units of the Vectra were sold. It was the

fourth best-selling vehicle in the segment, despite its attractive price.

During the first quarter, the Cruze also committed the audacity of almost reaching the same sales volu-me as the Prisma, Chevrolet’s compact sedan, which is priced at half the value of the medium sedan.

These figures, therefore, provide the direction and facilitate the life of the second model of the family to arrive in Brazil, the hatchback version.

A singular language. The version recei-

ved the name of Cruze Sport6 in the country. In Por-tuguese, it is pronounced “sport seis”, mixing English and Portuguese. In other markets, it is simply called the Cruze hatchback. Similar to the Cruze, which re-placed the Vectra, both of them sedans, the launch replaces the hatchback variation of its predecessor, called Vectra GT.

Grace Lieblein, president of GM Brazil, says the idea is to relate one model to the other, which is natu-ral. “The Cruze has been exceeding our expectations in Brazil, and in the world. The Cruze Sport6 has the same ingredients to maintain this successful trajec-tory.”

Sales began in April. Similar to the sedan, it will be available in two versions, the LT, and LTZ. The en-gine is the same, the Ecotec6 1.8 L flex. Both versions

Divulgação/GM

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Back to São Caetano do Sul

Santiago Chamorro is back to General Motors do Brasil as director of marketing and sales. That position used to be his between 2004 and 2007. The executive, which made his career within General Motors in Brazil, is arriving from GM’s unit in Colombia, where he was president since 2008.Chamorro is Colombian, as well as Jaime Ardila, president of GM South America.The new director will be based in São Caetano do Sul. He succeeds Ronaldo Znidarsis, a Brazilian, who abruptly retired two years after being named to the position, when Marcos Munhoz became vice president. Up to that moment, he had been president of GM and Venezuela.Chamorro, however, will take on additional responsibilities when compared to his pre-vious stay in the position. He will also take on the position of director of after sales, left open after Isela Costantini became president of GM Argentina. As a result, Cha-morro is now the director of sales, marketing, and after sales.The president of GM Colombia is now Jorge Majía, who was also Colombian. Mejía was general manager of Banco Finandina, specialized in vehicle fi nancing. However, he is not a stranger to the company since he worked for GM’s units in Brazil and Venezuela,

where he left around 10 years ago.

Santiago Chamorro: sales and marketing.

can be equipped with manual or automatic six speed transmissions.

The car comes equipped from factory with front and side airbags, traction and stability control, ABS brakes with EBD, 17-inch diameter wheels, electronic air-conditioning, electric steering, and steering wheel equipped with radio commands and other gadgets. The LTZ version is equipped with leather seats, sunroof, GPS on the panel, parking sensor, and start-stop button.

The company estimates that the LT version will account for 60% of the total models sales volume. It is estimated that the majority of the LTZ versions will be equipped with automatic transmission, accounting for 75% of the total.

The Cruze Sport6 was presented to the specialized press at the Cruz Alta test-driving facility in Indaia-tuba, SP, in early March. Its prices are slightly higher than the ones practiced for the Chevrolet Vectra GT, that is, between R$ 64.9 thousand and R$ 79.9 thou-sand, something like R$ 3000 less than its sedan bro-ther, in each of the versions.

When compared to its predecessor, the sales es-timates are signifi cantly higher. GM projects sales of around 1.1 thousand units of the Cruze Sport6 per

month, equivalent to 13,000 units for a period of 12 months. In 2011, the Vectra GT sold less than half the estimate, 6.2 thousand units. One year before, it sold 10.8 thousand units.

Half new. Gustavo Colossi, marketing director at GM Brazil, says that is where the possible compari-sons between the two models end. The company es-timates that 50% of the buyers will be newcomers to the Chevrolet brand. “During the launch of the Agile, we had the same expectation, and the ratio reached 60% during the fi rst months of sales.”

In the case of the Vectra GT, the majority of the buyers were already loyal GM customers. As for the choice of name, he stated, “It is a new name, inclu-ding globally, which we plan to strengthen as much as possible.”

This inverts the previous logic applied when giving different names to the hatchback and sedan versions of a same vehicle, such as the case of the Celta and the Prisma.

Colossi says the same idea will be applied in the next product launch, the Sonic, which will replace the Astra. It will maintain that name for two of its versions.

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Kia Optima should register sales of 3.2 thousand units in

2012, the volume destined by headquarters to the local market

Text Maira Nascimento, from Campinas, SP . maira@autodata.com.br

It is no news that the potential for expansion of the current Brazilian automotive ma-rket serves as a strong appeal for the arrival of new models. The race for consumers is becoming more evident when brand strategies focus on niche segments that show signs of significant growth. Kia Motors, for example, saw an opportunity in the full-size sedan segment and, starting this month, begins selling the Optima, the substitute of the Magentis.

According to the Brazilian subsidiary of the Kore-an manufacturer, the sedan segment in the country, in 2011, represented 761.2 thousand units, down from 780.7 thousand units the previous year. The full-size sedan segment, however, grew from 19.2 thousand units, in 2010, to 31.2 thousand units last year.

In order to get a piece of the pie, José Luiz Gandi-ni, president of Kia Motors do Brasil, projects sales of the new model will be limited to the lot made availa-ble domestic market by headquarters for the year, 3.2 thousand units. The first shipment of 200 units has already arrived in the country.

Although entirely renewed and renamed, the Op-tima is considered by the manufacturer as the third generation of the Magentis - the first generation was launched in 2001, and the second generation was launched in 2006.

Ready to be launched in the Brazilian market since the end of 2011, the presentation of the model was delayed, according to Gandini. “As a result of the 30 percentage-points increase in the IPI tax on imported vehicles, we preferred to delay the launch in order to observe the impact on domestic sales.”

Now, the vehicle is finally available at the dealers. It will be offered only in three colors - silver, whi-

te, and black - in two versions: the entry-level ver-sion priced at R$ 97,000, which is equipped with a 2.4 L 180 hp gasoline engine and six speed automatic transmission; and, the top-of-the-line version, which is also equipped with a start-stop system, xenon he-adlamps, and double sunroof, priced at R$ 106,000.

According to Ary Jorge Ribeiro, sales director, the least expensive model should account for 60% of the sales mix.

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The Jac effect?The Chinese brand arrived one year ago making a lot of noise

in the market, result of the massive investment in advertising.

However, the sales performance has been below expectations.

Text André Barros, from Mata de São João, BA . andreb@autodata.com.br

As I turned the key of the J5 sedan for a test drive in the roads of the metropoli-tan region of Salvador, the capital of Bahia, a familiar voice made its way through the speakers. “Good morning. This is Sérgio Habib.”

The entrepreneur, president of the SHC Group and the Jac Motors representative in Brazil, recorded a welcome CD to the journalists that was played in each of the models being test driven from the city’s airport to a resort in Praia do Forte beach. That is where - “in that beautiful beach” - the simultaneous launch of the vehicle, the celebration of the first anniversary since it arrived in the country, and the inauguration of 50 Jac dealers throughout the Brazilian market took place.

In his speech, Habib said that Jac “shook the Bra-zilian market and forced the competitors to reduce the prices and sell truly complete cars.”

The competitors counterattacked. Days after the noisy sales and marketing campaign by Habib’s com-pany in newspapers, magazines, Internet, radio, and television began, starring TV presenter Fausto Silva, Ford dropped the price of the Fiesta, a direct compe-titor of the Chinese J3, and added factory equipped ABS and airbags to the 1.6 L version.

The turmoil in the market, however, relied princi-pally in the ability of Habib and his team to generate noise in the media as opposed to the result in sales it-self. The maximum market share achieved by Jac with its three models - the J3, J3 Turin, and the J6 - was 1%, even when the sales volume broke the barrier of 3000 units in a single month. As a result, the per-formance closed below Habib’s initial expectations of 35,000 units, which he had revealed to AutoData in an interview for the From the Top section published in the March 2011 edition.

Between March and December of last year, 23,725 Jac models were licensed in the country, according to Fenabrave. In some of these months, Jac registered lower sales than its Chinese sister, Chery.

In the middle of the road. Jac’s perfor-mance can be divided into periods: before and after the announcement of the automotive regime by the government, which took place in September of last

49 April 2012

year. At the time, the IPI tax applied on its models, all imported from China, would suffer an increase of 30 percentage points.

“The increase in the IPI tax, despite our decision to maintaining the prices of the models, had a psycho-logical impact on the consumer. From one day to the next, doubts appeared regarding the future of the dealer network and the brand itself in the country,” stated Habib.

The result was noticed by the market. Between March 19 and the end of September, six months and 12 days of sales, 17.4 thousand J3, J3 Turin, and J6 models were licensed. During the six months follo-

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wing the government’s announcement, between Oc-tober and March, the total number of vehicles licen-sed was 11.3 thousand units.

The entrepreneur believes that business will re-cover based on two pillars. The first was November’s official announcement of a R$ 900 million investment to build a manufacturing facility in Camaçari, state of Bahia - the reason for the launch taking place in the state, since, according to Habib, Jac is now an official “citizen of the state”.

According to Habib, the investment in the facility provides the confidence the consumer needs to have to be certain the company has come to Brazil to stay.

Image Courtesy/Jac

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The automatic transmission is missing

Jac’s marketing campaigns are based on the principle that the con-sumer will pay a certain amount of money for a complete mo-del, without the traditional optional equipment kits offered by the competitors. With the J5, it’s the same. The TV advertisement sho-ws Fausto Silva driving the car while the factory items are presen-ted to the consumer: digital air-conditioning, ABS brakes with EBD, electric trio and light alloy wheels packaged at R$ 53.8 thousand, and nothing more. Yes, the consumer will pay more only if he/she is interested in frivolous items such as leather seats, bigger diameter wheels, or metallic painting. However, the consumer does not have an option, even if he wanted to pay for it, of an essential item for a medium sedan: automatic transmission.Sérgio Habib, president of SHC Group, which represents Jac in the Brazilian market, admitted that the item is missing: “We could sell more than the projected 700 to 1000 units per month if we had that option. For a sedan in this price range, it represents up to 25% of sales.” Habib added that this item is being developed, but should not arrive in the market prior to 2014. It should arrive with the new manufacturing facility, although the executive did not reveal whether it would be produced in Camaçari, BA, or be imported from China.

It also provides a guarantee that the prices of the J3, J3 Turin, J5 and J6 will be maintained.

The latest version of the automotive regime, an-nounced by the government, created a system of quo-tas that enables importers that are in the process of establishing local manufacturing facilities to claim a discount on the new IPI tax rate that will only be re-funded after the facilities are in operation.

The second pillar is the addition of models to the portfolio. The J5 medium sedan is the fourth model in the lineup, which also contains a hatchback, a com-pact sedan, and minivan versions. During the second

semester, the company is planning to introduce the J2 subcompact in the market. By then, the president of SHC Group expects to reacquire the 1% market sha-re. The investments in marketing will also continue. Habib and his team are creative. The speech recorded onto the CD in the J5, and the one-year marketing campaign, where the Jac consumers are the stars - who could be better than a consumer who speaks well about the good that was purchased? - represent two examples. This is why the manufacturers are paying attention to the Chinese brand. The Jac effect can re-turn, stronger, at any time.

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From the passenger to the driver seatAfter breaking away from Grupo Izzo, Harley-Davidson’s

plant in Brazil represents the beginning of a new phase in

the strategy to increase its presence in the country

Text Décio Costa, from Manaus, AM . decio@autodata.com.br

The 7000-m² area destined for Harley-Davidson do Brasil’s industrial operation in Manaus, AM, which is where the motorcycle producer began its operations in the country back in 1999, has become too small for the company’s plans in the region. The old installation, the � rst Harley-Davidson facility outside the US, was replaced by a brand-new 10,000-m² installation in the same city.

Image Courtesy/Harley-Davidson

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The inauguration took place in early March, and it marks another phase in a broad transformation that should help consolidate the brand in the region. The decision to expand was taken in 2009, and it followed the company’s global growth strategy. According to Mark Van Genderen, VP for Latin America, in addition to being the biggest market in the region, Brazil is also one of the 10 most important markets for the company in the world. “The manufacturing facility is part of a strategy to bring more new products to the Brazilian consumer.”

Local management. Despite the par-tnership having lasted more than 25 years, Harley--Davidson won the legal battle against Grupo Izzo. As a result, the motorcycle producer changed its plans and took over the commercial operations in Brazil. The strategy that was developed from that moment on was based on three fronts: faster and more frequent product development, a strong dealer network, lean and � exible manufacturing.

“The Brazilian operation is a perfect example of this strategy,” stated Harley-Davidson’s CEO, Keith Wandell. “The plant is a sign of the company’s com-mitment to Brazil and I am sure that we have made the right investment. In addition, if our focus is to ex-pand our presence in the country, the management must be local in order to understand the regions cus-tomers.”

The new unit employs 110 workers, and functions under the CKD regime. The ample and � at building,

located in the city’s Tarumã district, houses all of the processes, from receiving to parts inventories, from � nal quality testing to the packaging of the mo-torcycles, which are shipped completely assembled to the markets on pallets wrapped in paperboard.

The assembly line moves according to market de-mand, which, today, stands at around 30 units per day on one work shift. Depending on the model, the pro-cess takes between 14 and 35 minutes. The assembly of the engine, however, may require up to two and a half hours. In a separate climate-controlled environ-

The facility operates under the CKD regime and employs 110 workers.

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In easy installments

Harley-Davidson do Brasil is focused on ex-panding its sales in the country, increasing the number of products offered, strengthening the after sales, and increasing production volume. The company closed a deal with Banco Brades-co last year to provide support to the contracts closed by Harley-Davidson Financial Services with the Brazilian consumers. The motorcycles, which range in price between R$ 27,000 and R$ 105,000, can be � nanced up to 60 months. Longino Morawski, commercial director-supe-rintendent of Harley-Davidson in Brazil, believes that “the � nancing program should contribute to increase our sales by 20% to 30% in 2012.”

ment located in the beginning of the line, where the motorcycle frames are located, eight workers patien-tly � t each part in order to give life to the six engine models produced at the facility.

Currently, the operation in Manaus assembles around 500 units per month, practically the same monthly sales volume. However, according to Celso Ganeko, industrial director-superintendent, the ins-tallations were planned to enable � exible and agile production. “The receiving of the parts and the as-sembly in a single environment offers facility and spe-ed in an eventual increase of capacity.”

Eighteen of the nineteen models offered in the domestic market, including one for military use, are assembled in the new facility. At the previous facility, only 13 models were assembled.

Once in control of the business in April of last year, Harley-Davidson created a subsidiary in São Paulo with a focus on the expansion of the dealer ne-twork. Since then, 11 new stores were opened in the country, and an additional seven should be inaugura-ted this year. The company also invested in its after sales services by opening a parts distribution center for more than 12,000 items, managed by Penske Lo-gistics. The distribution center is located in Cajamar, SP, which also houses a training center for mechanics.

The initiatives, as the � gures seem to indicate, have bene� ted the business. According to � gures from Renavam, 4322 Harley-Davidson motorcycles were licensed in the Brazilian market in 2011, an increa-se of 7% when compared to 2010. The performance enabled the company to achieve a 10% market share in the segment of motorcycles equipped with engi-nes above 600 cm³. According to Longino Morawski, commercial director-superintendent, “The expansion of the product line, in addition to the new manufactu-ring facility, is fundamental to allow a more competi-tive structure in the premium motorcycles segment, which is growing in the country.”

54 April 2012

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New entrants and a number of brands

As sales of imported vehicles in the domestic market reach 5 million

units, the government applies restrictions to the segment’s

activities

Text Décio Costa . decio@autodata.com.br

In March 1990, the newly elected government at the time reopened the Brazilian ports to imported products. Since then, more than 5 million vehicles have been imported into the country, from countries with which Brazil maintains bilateral trade agreements and others.

Independent of the ideological perspective, ho-wever, the mark has revealed the abyss between the country’s market reality and what foreign markets offered.

“Brazil opened itself to the world by breaking a series of barriers that kept it from accessing tech-nology,” stated Jackson Schneider, then president at Anfavea, who participated in the celebration of the 20th anniversary of the opening of the market, which took place in 2010. “At that moment, the automotive sector began its process of updating.”

Amidst a profound recession, faced with a gallo-ping unemployment rate and successive plans with the objective of taming inflation, which surpassed 1000% per year, the country opened its doors to opportunities from outside. The country’s vehicles in the early 90s did not possess access to technological

advancements. They were still produced in antiqua-ted manufacturing processes. At the time, they were compared to wagons.

The government believed that by increasing com-petition in the industrial sector, it would manage to bring inflation down. In order to achieve this, it crea-ted a schedule whereby import tariffs were gradually reduced, forcing the local industry to invest in up-grading its production processes as well as the qua-lity of its products. The imported vehicle possessed better finishing and a lot more content than what was being offered by the local manufacturers at the time. That became the catalyst for transformation. Within a short period, the Brazilian consumer became seduced by a vast array of models and brands in a market that was demanding novelties, a fertile ground, despite the fragile economy at the time.

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Image Courtesy/Porto de Santos

55 April 2012

According to figures from Anfavea, between 1990 and 2011, 5.2 million imported vehicles were licensed in the country. During the same period, independent im-porters and automakers without local manufacturing fa-cilities in the country - that is, not members of Anfavea - imported 723.5 thousand units, that is, 14% of the total.

Last year, however, the total number of imported vehicles licensed in the country reached its highest level, 858,000 units, representing an increase of 30% when compared to 2010, and a market share of 23.6% from a total market of 3.6 million units. Abeiva, the association created in 1991 to represent the brands that do not have local manufacturing facilities, has 26 members who contributed with imports of 199.4 thousand units.

Barriers. Although still open to the world, the country changed the rules of the game for the impor-ted vehicles segment. In summary, vehicles brought from outside the Mercosul and Mexico, in addition to paying an import tax of 35%, will be subject to a 30 percentage-points increase in the IPI tax. The ACE 55, name of the trade agreement with Mexico, was rede-signed and will now be based on quotas in an attempt to balance the Brazilian foreign trade balance.

The changes significantly affected the business of the importers. In addition to the inevitable increase in

1990/1995 1996/2000 2001/2005 2006/2011

Imported vehicles - Total 670 967 1 227 351 517 046 2 801 641

Importers 437 319 127 221 50 193 429 406

Importers share 17,4% 10,4% 9,7% 15,4%

In 1991, when Abeiva was created, it had

seven members. In 1995, the association had 30

members.

1996 - 2000: A number of companies that

began by importing their vehicles started deciding about establishing local

manufacturing facilities at the time, such as

Audi, Chrysler, Honda Automóveis, Mitsubishi,

Nissan, PSA Peugeot Citroën, and Renault. In

addition, some new brands that began importing their products into the country, such as Lada and Mazda, abandoned the market at

the time

BMW joined Abeiva and the period

becomes marked by the consolidation of

the investments that had been announced

in the previous period. PSA Peugeot Citroën,

for example, begins producing in Porto Real,

RJ.

The phase will be remembered by the

arrival of the Chinese in the country, as

of 2008, in addition to another cycle of

announcements related to the establishment of

manufacturing facilities by companies that are still importing, such as Jac Motors and Chery.

Anfavea and the importers

Since 1990, more than 5 million imported vehicles entered the Brazilian ports. In the highs and lows of these 22 years, some importers vanished and others installed production bases in the country.

price, which made the vehicles less competitive, fore-casts for the year crumbled. According to the former president of Abeiva, José Luiz Gandini, “The negative impact should reach 40%.” Earlier this year, the repre-sentative of the association, who is also president of Kia in Brazil, stated that there would be a 20% drop when compared to the 199.4 thousand units licensed in 2011. “Our forecast called for 160,000 vehicles licensed this year, which will probably not happen. We want the same type of treatment for everybody, since today’s conditions make us fear even the shutting down of dealers.”

Independent of whether the former president is exaggerating, it is certain that there is no market in the world without the complement of imports. In the case of Brazil, the government has already announ-ced there will be new rules, part of what is called the Bigger Brazil Plan. The purpose is to format a set of measures to protect the local industry and drive ex-ports. For those importers that do not have plans to establish manufacturing facilities in the country, wai-ting is the only alternative.

“In April, as inventories drop to normal levels, we will have a better idea how the year will progress,” stated Flávio Padovan, recently elected president of Abeiva.”In any event, we know that we will have to sur-vive with the new rules at least until December. From then on, each company will follow its own strategy.”

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“Ein Bier Bitte, Dr. Z!”

The new A-Class is the most recent example of Mercedes-Benz’s effort to make the brand more attractive to the next generations of consumers

Text Fred Carvalho, from Geneva, Switzerland . fred@autodata.com.br

The translation of the title above is: “A beer, please, Dr. Z!” This phrase was repeated many times on the evening of March 5 in Geneva, Switzerland, during the launch of the new A-Class. The CEO of Daimler, Dieter Zetsche, was greeting the guests with the traditional apron used by the bartenders. Such a posture provides a picture of the silent, and quick, revolution that has been going on in the most traditional vehicle producer in the world, which, 126 years ago, created the automobile.

The beer request was made in various langua-ges, ranging from German to English, Portuguese to Spanish, etc. Mercedes-Benz is like that, speaking a number of languages in an attempt to understand what its current and future public want without changing the image of a prestigious brand. It is fun-damental to pay attention to a number of facts that have taken place during the past years in order to perceive these changes emanating from Stuttgart:

1. Partnership with Renault Nissan for the deve-lopment of a single platform for a new generation smart and Twingo. The possibility of a Nissan In� ni-

ti model using the platform of the A-Class. Studies for the production of engines or vehicle parts in a number of manufacturing facilities from the three companies in the world;

2. The agreement with Apple for the technologi-cal development needed to enable the US company to equip the vehicles produced by the German com-pany;

3. A substantial increase in the number of wo-men and young people in command positions within Daimler Group;

4. Decision to build or increase manufacturing

Dr. Z: informality as opposed to a tie, at the Geneva Auto Show

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57 April 2012

A-Class: a series of technological innovations and a more modern design to attract the young public.

facilities outside of Europe, preferably in China, US, Mexico, and, perhaps even in Brazil;

5. Global platforms not only in automobiles but also in commercial vehicles, with the necessary care to place the appropriate product in each market;

6. The development of entirely new models such as in the case of the platforms of the A-Class and B-Class, sedan, station wagon, and SUV, or the re--reading of successes of the past, such as the seagull wing doors or the CLC based on cars from the last century;

7. Colossal investments in the commercial vehi-cles segment, more than €2 billion, and the appe-arance of the Actros Euro 6 family of trucks, well ahead of the competition;

8. The company has become more agile, ef� cient, and � exible. It has also improved its quality and, it is important to mention, become more lucrative.

Zetsche and his team have drafted the future of the company up to 2020. By that time, he plans for the company to be producing 2 million units per year, almost 700,000 units more than what is being produced today. Among the new products, 10 new models should be launched by 2015, with a special mention to the � ve products derived from the NGCC platform, the New Generation Compact Cars. The � rst is already on the streets. The new B-Class was

introduced at the Frankfurt auto show last year.The car has a more aggressive design, which

implies the search for young consumers. It also has technological sophistications. In January and Febru-ary, the vehicle reached a record high sales volume of more than 25,000 units, and more than 100,000 units in backlog.

According to Zetsche, who, in addition to being the CEO of Daimler, is also responsible for the Mercedes-Benz brand, “The most important thing is that one in every three customers is new to the Mercedes-Benz brand. This is what we call a great beginning.”

At the Geneva Auto Show, the company exhibi-ted the second product of this platform: the new A--Class. “Brand-new, since we conceived the car from a blank sheet of paper. The real predecessor of the new vehicle is not the old A-Class. It is the Baby Benz, the 190, from 1982. At that time, we rejuve-nated our brand, and that is exactly what we plan to do now. However, the new project is even more ambitious. A single platform is being used for the A-Class, the B-Class, the new CLC four-door Coupé, the GLC compact utility, and a CLC station wagon.”

The new product prices are similar to those of the old line, slightly higher, something around €25,000, for the Europeans. The vehicle is competing

Image Courtesy/MBB

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The answer has changed

During the past years, every time Dieter Zets-che met with Brazilian journalists, he had to answer the same old question: “When will Mercedes-Benz start producing automobiles in Brazil again?” And the answer was always the same: “There are no studies. The size of the Brazilian market for the company’s products does not enable the necessary scale.”In March, however, the answer changed: “We know there are problems in the Brazil-Mexi-co agreement and this affects the strategies of the companies. We know we can produce Mercedes-Benz engines at our partner Nissan’s facility to supply to the United States, and we could also meet the Brazilian demand if we produced in Mexico. But with the lack of con-� dence about the solidity of the agreement be-tween Brazil and Mexico, the alternative could be, who knows, produce in Brazil.”He said that he knows the market well. “We have been producing in that region for more than half a century. We have a partnership with Renault Nissan, which has production units there and we need to grow outside of Europe. At least, we know that the painting and engine production issues would not pose dif� culties. However, that depends on the studies. We have to respect the size of the Brazilian market, as well as the size of the La-tin American market.”For the meantime, production in Germany and Hungary will continue. In the coming years, also in China. “We need to grow our produc-tion outside of Europe, principally in the re-gions where sales growth is stronger. United States and China are markets that will require us to have local production.”Zetsche added, “Partnerships are good in order to rationalize costs. It is extremely interesting to see the increase in the possibilities provided by our agreement with Renault Nissan - not only for the development of platforms, but also for the production of vehicles.”

against the BMW Series 1, the new generation of the Volkswagen Golf, and the Audi A1, among other premium compacts. “This segment should represent more than 4 million units in the coming 10 years.”

People from the company’s board, such as Tho-mas Weber, say the car was designed for the young consumer who uses the iPhone, iPad. That is, the consumer is born connected. “The biggest challenge in putting so much technology, such as the Siri voice command function, is not distracting the driver. The new product has all of the languages used by the young consumer, ranging from Google to Facebook, and even the Android - which will be available by the second semester - as well as an extraordinary compatibility with everything else that is produced by Apple, our partner in the development of these novelties.”

All of the gadgets can be continuously updated, but there is a special care in order to avoid possi-ble hacker invasion in the command systems. “We created protection barriers that make it unviable to access our controls.”

While these added technologies represent the

The interior is luxurious and functional, in addition to providing signifi cant connectivity

59 April 2012

current fad, other novelties are being prepared for the coming years, by 2016, the latest. “We hope to have communication systems between vehicles, the car-to-car. In the same manner, we are searching for alternatives to making the driver become less invol-ved in the actual driving of the car. We have the Distronic system. It will gradually assume the com-mand.”

These innovations will be present in all of the new platform’s models. But, what differs the A-Class from the B-Class models? The former is 16 cm lower than the old model, which provides a lower center of

gravity, something the moose can appreciate, jokes Zetsche. The B-Class model is higher, with more spa-ce in the rear. It is more of a young family’s car.

“We want to conquer the young consumers, or the gentlemen with gray hair and young hearts,” sta-ted Zetsche. “The new A-Class will be signi� cantly important in the new design of the future of Mer-cedes-Benz.”

This design will be much clearer by 2015. By then, Mercedes-Benz plans to launch another wave of new products.

It is a signi� cant sequence of product launches. It will begin with the new generation of the C-Class, scheduled for 2014, and a sportier station wagon, known today as the Sports Tourer. Next, the conver-tible C-Class, the CLS station wagon, the so-called X218 project, the S-Class XL and Pullman - two ver-sions basically using the retired Maybach project. In addition, the Cabriolet S and an SUV, the MLC, ML--Coupé, or project C292, to compete with the BMW X-6. All of them loaded with a younger pro� le, such as Zetsche expects from his own brand.

The new A-Class arrives to compete with the BMW Series 1 and Audi A1, among other models

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The vehicle manufacturers allow

one to appreciate such product in its

material form, never in what is singular in its creation, its

soul.

When this edition makes it to the printers, ano-ther new regime that will pave the future of the automotive sector will already be known. That is, at least until 2017, when the program is forecast to be consolidated. More than this, the attitudes of the different players in the industrial chain, with the automakers taking the lead, should provide the driving energy for the strategic movement that will celebrate the rebirth of the mercantile-based eco-nomy of the 17th century.

Within it, the Brazilian automotive industry will de� nitely be free from the economic forces affec-ting the country’s foreign trade balance. It will submit the up--to-now indestructible oligopoly of the global manufacturers to the power of a nation that kno-ws how to conduct trade in a new globalized environment. Hurray for us!

Prof. Marcelo Paiva Abreu, from PUC University in Rio de Janeiro, stated with notable perception, in an article publi-shed on the March 19 edition of the O Estado de São Paulo newspaper, “In terms of trade policy, one needs to avoid repeating the worst (experiences) of the past and focus on the future.” Prof. Abreu demonstrates that the relative weight of the industrial product in the country’s GDP derives fundamentally from the “favorable evolution of the Brazilian comparative advantages in other sectors of the economy.” We believe he provides an important call for, in the au-tomotive case, the imposition of an essential sense of self-criticism while evaluating two distinct mo-ments of the presence of this activity in our terri-tory.

The first period refers to when it was being brought to life, during the time of President Jusceli-no Kubitschek’s Program of Targets. At the time, the incentives that were offered for its establishment in the country were not accompanied by the necessary initiatives for the creation of a base for the local development of intelligence in the technological and innovation � elds. This base could have been created through educational programs of great density in the international centers in which they were being developed. Second, the consequent sterilization of any such initiatives, even after the � rst million units

had been produced and sold in the domestic market, in 1980. Instead, the choice was made to defend the so-called national product by barring imports.

This perspective - exempt from any ideological or favorable acceptance of the loss of com-petitiveness principally marked by our parochial vision regarding new rules in a borderless foreign trade - is what moves us to a good and indispensable specula-tive attitude. We will focus on a

few, in order to avoid attention from being dispersed.Initially, we will take into consideration the his-

toric and inevitable oligopolistic nature of the auto-motive industry. It concentrates, by nature, and it will always be marked by the presence of few represen-tatives around the world, when contrasted with the size of the material and human resources it requires. Throughout time, losers have disappeared, and the winners have been those who have used their in-telligence to always pioneer, which is what has made virtuous three pillars viable and self-sustainable: Pro-duct, People, and Pro� t, known as the three P’s.

Brazil makes its way back to the 17th century

Luiz Carlos Mello . mello@ceaut.com.br

File

AD

61 April 2012

61 April 2012

Nowadays, this translates into an irreversible globalization. The so-called global car is a paradigm concept that everyone dedicates themselves to en-sure that a product and pro� t will interchange at a level of excellence and, therefore, of competitive-ness. To achieve this, any business creator and owner attempts to retain in the origins of the company what is singular in its creative force, only allowing the outside observers to appreciate such product in its body, not in soul.

We are all like this. Petrobras, for example, de-veloped deep water oil prospecting and exploration. Toyota, which conducted the major recall due to an alleged defect in the involuntary acceleration of its victorious Corolla in the US, was censored for the extreme verticalization in the decision-making process that it imposed upon the local operation. That is, the strategic process was Japanese, in origin.

Let us look at the results that are being envi-sioned by a number of measures that have been implemented under the auspices of an automotive regime. Newcomers, and existing players alike, are being forced to invest in a genuinely Brazilian pro-duct, in body and soul. They are expected to produ-ce vehicles with higher value-added here. It should be asked why they would comply with the latter. Well, if the latter represent a level of product that is said to be way above the limits stipulated for the Brazilian consumer - the limit, by the way, was esta-blished by the sector chamber in 1992 - why would the automakers produce in Brazil what they do not produce in any of their major markets? Why do they prefer to continue supplying them from where they originated?

Why would they do this now, when the condi-tions necessary to be eligible for the original IPI tax rate would turn into - in time and within the con-text of a mandatory supply structure for compo-nents and systems - an overload in costs and capa-city, especially when it has signi� cant idle capacity elsewhere? Finally, why would they engage when not believing entirely on the consistency of this new regime, as well as the renewal of the agreement with Mexico in 2016, and the closing of agreements be-tween Brazil and other countries?

So, this is it. We should look back at the lessons taken from backward thinking and preconceptions, which gave us a market that was closed to the in-

ternational automotive business, an arti� cial and castrating price control system that af� icted the Brazilian automotive activity, a Special Secretariat of Information Technology, SEI - which brought us back to the stone age exactly when practically the whole world was entering, and quickly advancing to-wards, the age of computational knowledge, plus a cry-baby business attitude that is always searching for of� cial incentives that are punctual in nature and possess no structural ef� cacy, all of this - to say the least - has taught us nothing.

On the contrary. All of this has made us sickly fearful about the world, despite our more than abundant capacity to dare. After all, we have been building vehicles for more than � fty years. This at-titude has made us less respectful in light of our position as the � fth biggest vehicle producer in the world, especially after having literally lost the de-cade of the 80s, after the � rst million vehicles in 1980 - when countries such as China and India were still producing tricycles, and the like. It has made us less aware to the automotive oligopoly, which Brazil does not belong to, and should continue to march and dominate, independent of whether we are more or less closed to the globalized world.

To the Brazilian consumer, whose access to vehi-cles with higher value-added has been impacted, who is not exactly the winner, the potatoes.

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Brazilian multinationalNeobus and Navistar seal a partnership that was being negotiated for four years and create the NeoStar brand of buses

Text Roberto Hunoff . roberto@autodata.com.br

Neobus, the fourth largest bus body builder in Brazil, and Navistar, one of the major players in the bus chassis and truck segments, have known each other for a long time. During the past 10 years, they rehearsed doing things together with the objective of fine--tuning understandings that could eventually lead to a partnership.

63 April 2012

The fi rst concrete step occurred in September 2008, when the company from Caxias do Sul, RS, announced an alliance with Camiones y Motores In-ternational de Mexico, a Navistar subsidiary.

At the time, the initiative had the objective of assembling a structure initially capable of produ-cing 1.5 thousand buses per year in Mexico, where Neobus already had an operation that was under--utilized. The exchange rate made it diffi cult to ship components from Brazil for assembly in Toluca.

The global fi nancial crisis set in and the project was placed in the back burner, but never abando-ned. During the past four years, whenever questio-ned about the operation, Edson Tomiello, president of Neobus, would change subject and offer little in-formation, although the trips to the US and Mexico were frequent.

Second brand. The fi rst effective and pu-blic signal that the association would become real occurred early in 2011. Neobus placed on and 10 in the local newspaper informing it had received an en-vironmental license from the state authorities allo-wing it to produce chassis in its facility.

The partnership only became offi cial, however,

seven months later. In February, the president of the bus body builder supplied details about the opera-tion. The facility in Caxias do Sul began producing the NeoStar bus brand, initially limited to the 10-ton microbus destined to meet demand from diffe-rent segments in Brazil and some countries in South America.

The Neobus body is assembled on a Navistar chassis, also developed in Caxias do Sul, based on the technology supplied by the new partner. “We are a new option of ready vehicles for the Brazilian and South American markets,” stated Tomiello.

In order to close the deal, Marcopolo had to be included, since it was the owner of 45% of Neobus at the time. The country’s leading bus body producer sold 12% of its equity in Neobus to Navistar, which took another 35% equity from the personal holding of Edson Tomiello, the controller with 53% of San

Marino, the company that owns the Neobus brand.The value of the deal was not divulged by any of

the players. “It took four years of negotiations to re-ach an agreement for the convergence of everyone’s interests,” stated Tomiello.

As a result, San Marino entered the list of resi-lient multinational companies. It has ambitious gro-wth plans in the global bus market. The fi rst phase calls for the local production of the microbus with a local content ratio of more than 65%. Electro-nic components, and those with higher complexity,

NeoStar 10-ton microbus, developed to meet demand from different market segments in Brazil and selected countries in South America

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On the way to the first billion

The partnership with Navistar, and the establishment of a second manufacturing in Brazil, according to Edson Tomiello, president of Neobus, represents a new mark in the company’s 12-year history. Still ac-cording to him, these initiatives integrate a strategy that has the objective of achieving revenues of R$ 1 billion within the next four years. “This partnership means that Neobus will be positioned as a world-class company.” In 1999, when it began producing buses, the company had 50 employees and revenues of R$ 6 million. Today, it has a workforce of 2.3 thousand.Last year, Neobus produced 3863 bus bodies, representing a drop of 1.6% when compared to 2010, according to the bus body builders association, Fabus. Despite the lower volume, revenues increased 23% when compared to 2010, reaching more than R$ 500 million. The result derived from sales of BRT and light intercity models, which have higher value-added content. For 2012, the company estimates to increase its revenues by 20%. Exports, which have been limited to at least 10% of total revenues, should increase 215% this year as a result of the new line of intercity buses, which took two years to be develo-ped and investments of R$ 40 million.The partner, Navistar, which is headquartered in the US, has annual revenues of more than US$ 15 billion. The company owns IC Bus, the biggest school bus producer in the world, with annual production volume of 16,000 units. It also controls the engine manufacturer, MWM, and truck manufacturer, International, which have annual production volumes of 240,000 engines and 90,000 vehicles, respectively

as well as the Navistar technology, will come from abroad.

During the first year of operation, the president of Neobus expects to sell 450 units of the new mo-del. The body is the same as the one used in the companies microbuses, with only a few adaptations. According to Adelir Boschetti, engineering director, “The vehicle is extremely robust.”

Exports. The second phase of the partnership will be more intense. In 2013, the facility projected for Mexico should receive partially knocked down bus bodies from Caxias do Sul in order to complete the production with the Navistar chassis and MWM International’s engines, controlled by the partner. The objective is to offer these products in the US and in selected countries in South America, such as Colombia. The size of the operation, as well as the investment necessary, however, have not yet been defined by the companies.

The intercity line should be launched in the begin-ning of the second semester of this year. It will be des-tined to meet demand from the domestic market. Ac-cording to Tomiello, the vehicles will be equipped with

technologies that are still not available in the country. In addition to the international partnership -

as well as a way of enabling increased production of the new line in Caxias do Sul, Neobus is in the process of investing in the construction of a ma-nufacturing facility in the city of Três Rios, RJ. The investment, valued at R$ 90 million, will be sourced internally and from financial operations. The facility should go into operation in October. Initially, it will have 1.2 thousand employees and an annual pro-duction capacity of 4 thousand urban Neobus brand buses, assembled on various chassis. The facility will also house a technological innovation center to sus-tain the company’s policy of continuous investment.

According to Tomiello, the company is preparing itself for upcoming demand from the World Cup and the Olympics. In addition, since its major market is in the state of Rio de Janeiro, especially for the micro-bus, the facility in that state should focus its business on delivering higher value-added buses, such as the articulated models that are destined to the bus ra-pid transit systems, and the new intercity buses, both with the Neobus brand. The NeoStar line will have an annual production capacity of 1 thousand units.

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The road infrastructure chaos is a corrosive threat!

Transportation in Brazil has never been taken seriously. Here, many diagnostics regarding trans-portation are made, but there is very little therapy. Everything ends up in the vacuum of negligence and indifference of the inconsequence and endemic cor-ruption. The decadent and calamitous state of our road infrastructure affects the Brazilian economy to the tune of the GDP in Argentina, if not more.

In this field, progress always occurs in very small doses. This is a legacy left over from the times of the Empire. The privatization of certain portions of roads has contributed to improve them.

However, many drivers continue to risk driving on non-toll roads. They are the ones who are explo-red - or ingenuous - who work for the oil, that is, only to pay off the variable costs of the operation. No resources left for maintenance or the replacement of worn out com-ponents that wear out quickly on lunar pavements.

For these eternally indebted drivers, a tow represents an unbea-rable cost that should be avoided at any cost, despite the risk of losing one’s life. These adventurous escapes are putting an end to what is left of these secondary roads.

Inefficient transportation represents inflation. It wastes capital, energy, label, and increases the costs of the goods transported through longer travel cycles. It causes losses of opportunity for capital, damage to durable goods, incapacitating discontinuities for cus-tomers, and, in addition to the loss from accidents, deaths, and environmental damages. There is also pilla-ging, in a truly Brazilian modality: thefts and robbery

Cezar de Aguiar . cezar.aguiar@tecknowledge.com.br

The decadent and calamitous

state of our road infrastructure

causes an annual damage to the

Brazilian economy that is equivalent

to the GDP in Argentina.

of vehicles with the hijacking and murder of the driver and passengers. This mentality also causes the goods to be stolen and the vehicles end up being dismantled and sold in parts to avoid identification, thus creating difficulties for the police to act.

Insurance companies are refusing to cover certain types of products and transportation routes. We have returned to the medieval era, when safe transportation requires armed escorts and the formation of convoys.

All this is added to the natural calamities, land and mudslides, infiltrations, flooding, and improvised asphalt patches, as well as temporary detours that end up becoming definitive. The roads are full of eternal holes resulting from the abuses of weight in the transportation of cargo, and a lack of punishment. This represents a picture of ever-increasing desola-tion.

Resources exist. Projects, also. However, surprisingly, the money remains in government coffers and no action is taken. This represents a suicidal surplus, with inflation undermining values and ruining an entire class of service providers due

to inaction.We know what to do, since the only govern-

ment action we see now is the propaganda of the never-in-the-history-of-this--country. The rest is always left for later, after the election. After the reelection. After the end of an unfinished road. After the after! Until when?

©iStockphoto.com/Maksim Nesvit

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The focus is in the luggage compartmentMedium sedans increasingly gain the preference of the consumer and the attention of the manufacturers

Text Ricardo Panessa . redacaoad@autodata.com.br

With 19 models competing for the preference of the consumer, the medium sedan segment registered an increase that was higher than the average market growth last year. With the arrival of new models from different brands, this trend should continue to gain additional strength this year. Sales in the segment totaled 200 thousand units in 2011, regis-tering an increase of 13.6%, and a 2.9% expansion within the total amount of passenger and light commercial vehicles sold in the domestic market.

The share of medium sedans in the total market registered an increase of almost 2 percentage points within a year, increasing from 6.5% during the first two months of 2011 to 8.35% this year. With pri-

ces that vary between R$ 70,000 and R$ 90,000, competition between local and imported models is significant, making it worthy of special treatment by the automakers.

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Among the most recent product launches, the new Honda Civic and the Chevrolet Cruze, both of them produced in the country, as well as the Chine-se Jac J5 and the Argentinean Renault Fluence. The Toyota Corolla, Volkswagen Jetta, Fiat Linea, Peuge-ot 408, Kia Cerato, and Hyundai Elantra, as well as the Japanese Mitsubishi Lancer - which has been re--launched in Brazil as a top-of-the-line model, sup-ported by an intense advertising campaign - and the Chinese Lifan 620 and the Chery Cielo complete the list of players in the segment.

Last year, the Corolla was the isolated leader with sales of 53.1 thousand units. It was followed by the Civic, with 23,000 units, the Kia Cerato, with 20.7 thousand units, the Jetta, with 14,000 units, and the Linea, with 12.2 thousand units.

In 2012, as a result of new product launches, com-petition got tougher and there has been a real dance of chairs down from the second position. The Corolla is still ahead of the pack, but with an advantage when compared to the others. In January, the three bestsel-lers in the segment were the Corolla, with 3.6 thou-sand units, the Cruze, with 2.6 thousand units, and the Jetta, with 2000 units. The new Civic, which had just arrived in the market, closed the month in the fourth position, with 1.4 thousand units.

In February, however, the Civic moved into the second position with sales of 2.9 thousand units, while the Corolla maintained its leadership with a

similar sales volume. The Cruze closed the month in the third place, with a similar sales volume as the Honda model, slightly more than 2.8 thousand units.

In March, the Cruze moved into the Civic’s po-sition and, in light of the good result during the month, became the second best-selling model du-ring the first quarter, with sales of 9147 units, when compared to the Toyota Corolla’s 12,142 units. The Civic closed the quarter in the third position of the ranking with sales of 7.9 thousand units, followed by the Jetta, with almost 6.4 thousand units.

A newcomer to the segment registered a good performance. The Renault Fluence, which closed 2011 in the eighth position of the ranking, moved up to the fifth position during the first three months of the year, reaching total sales of more than 3.5 thousand units.

History. Launched as the first Volkswagen lu-xury car, the old and famous Santana is still today

1º Toyota Corolla 53 156

2º Honda Civic 22 962

3º Kia Cerato 20 686

4º VW Jetta 14 087

5º Fiat Linea 12 260

6º Chevrolet Vectra 11 578

7º Nissan Sentra 10 490

8º Renault Fluence 10 386

9º Chevrolet Cruze 9 402

10º Ford Focus 8 358

Medium sedans: The 10 best selling models in 2011.*

*Source: Fenabrave

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a synonym of successful sedan. The model divided the market with other icons in the segment, such as the Opala, produced between 1968 and 1992, the Chevrolet Monza, from 1982 to 1996, and the Ford Del Rey, produced from 1981 to 1991. Between 1984 and 2006, the Santana registered sales of 540,000 units in Brazil. Production of the model was discon-tinued in 2006.

Imported models. As the market opened to imports in the early 90s, the automotive sector’s scenario changed completely, which reflected in the renewal of the sedan segment. The locally produced models at the time had to face competition from lit-tle known brands in Brazil at the time, but which often represented superior offers and content.

The Japanese were the first to wake up to this commercial opportunity. Honda began importing the Civic from Japan in 1992, along with the luxury Ac-cord sedan. In 1993, Toyota began importing the Co-rolla from Japan, still today the brand’s best selling model ever. Almost 35 million units of the model have been sold in the world since its launch.

Soon, the Brazilian market showed its apprecia-

tion for more modern technologies and accessible prices. In 1997, Honda began producing the Civic lo-cally and, in the following year, Toyota started pro-ducing the Corolla in the country. Slightly more than a decade after imports were reopened, in 2002, the Honda Civic was already the 16th best-selling model and the first in the ranking of the medium sedans, with sales of 20.5 thousand units, ahead of the San-tana, with 19.5 thousand units.

Other automakers soon perceived that the Bra-zilian market, in general - and the medium sedans segment, in particular - where worthy of being ex-plored. Taking advantage of the benefits from the Mercosul, and with an eye in this growing segment, Ford, which already sold the Focus Hatch, began im-porting the models sedan version from Argentina. In 2006, French Peugeot adopted the same strategy by importing the sedan version of the 307 from Argen-tina and, in 2007, Citroën began importing the C4 Pallas also from that country.

In the early part of the last decade, the sedans segment was very active, with more than 10 models fighting for the preference of the consumer. Last year, the segment had nothing less than 24 models, inclu-ding some that had their production discontinued, such as the Vectra and the Mégane, in order to give room to more modern models that arrived to compete at the top of the ranking in the segment.

1º Toyota Corolla 12 142

2º Chvrolet Cruze 9 147

3º Honda Civic 7 010

4º VW Jetta 6 380

5º Renault Fluence 3 541

Medium sedans: The five best selling models during the first quarter of 2012

*Source: Fenabrave

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lierExemplary adolescentDelphi South America, which supplies to all vehicle manufacturers in the country, celebrates 15th anniversary of a successful business model

Text Décio Costa . decio@autodata.com.br

In some wealthy families, sometimes one finds a spoiled son who, instead of taking advantage of the facilities the inheritance provides, takes on the responsibilities and successfully strengthens the assets on its own. Delphi South America, which was born 15 years ago, adds its name to the list of successful heirs.

Slightly before becoming an independent company in 1999, when it parted the splendid protection of its progenitor, General Motors, the headquarters of the systems supplier defined strategies for South Ameri-ca based on the potential of the region’s market, with Brazil as the leading location for its business. Gábor Deák, president of Delphi South America, remembers, “During the first years, we needed to decide where the company would remain active and how to consolidate

the operational tasks.”While the operation here searched for, and impro-

ved, its best vocations - it sold its automotive battery division - it embarked in a complicated re-organization effort that saw it forced to file for Chapter 11 bankrup-tcy protection in the US, in 2005. Although the US operations were faced with inevitable cuts and plant shutdowns that would tragically affect the future of the company, the businesses in South America offered proof that, in addition to the rings, the fingers had also been saved.

Expanded revenues. Since the operation was conceived as a division for the region, the systems supplier has invested an average of US$ 30 million per year. Throughout its existence, revenues multiplied by 3.5, reaching US$ 1.3 billion last year. “A moderate gro-wth when compared to 2010, when we closed at US$ 1.2 billion. However, it is important to highlight that our growth has been continuous.”

As a result of the profound restructuring it im-posed upon itself, the company redirected its ope-rations to think about offering solutions destined to the automotive industry based on environmental, Di

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luer Delphi in numbers

5 application centers - In São Paulo: Cotia,

Jaguariúna and Jambeiro. In Minas Gerais:

Betim. In Argentina: Buenos Aires.

capacidade faturoucapacidade faturou

104,000

30 Present in

30 countries

12,4 thousand customers,

including the aftermarket

15 technological

centers in 11 countries

17,000 scientists and

engineers

In South America

10 manufacturing facilities - In Minas Gerais:

Conceição dos Ouros, Jacutinga, Itabirito and

Paraisópolis. In São Paulo: Cotia, Espírito Santo

do Pinhal, Jaguariúna, Piracicaba and Jambeiro.

In Argentina: Rio Grande.

11,000 employees

3 technological centers: Piracicaba and São

Caetano do Sul, in the state of São Paulo; and,

Paraisópolis, in the state of Minas Gerais

In the world

safety, and connectivity trends. Such policy sets the direction for the development of the engine mana-gement system capable of reducing fuel consump-tion, or the always-increasing use of navigation equipment in the vehicles.

Delphi, which consolidated itself in the automotive sector, established fi ve business fronts as a supplier of solutions to the industry. The powertrain division sup-plies manufacturers with engine management systems. The electro-electronic architecture division supplies the assembly lines with information distribution products, electric wire harnesses, and others. Sound equipment, tracking devices, navigators, and similar products be-long to the electronics and safety area. The thermal division supplies air-conditioning systems, while Delphi Solutions in Products and Services is responsible for the after-sales, not solely for the aftermarket, but also the supply of diagnostics equipment, “an area where we were not present before, which derived from the search for new clients and businesses.”

Today, Delphi South America is a giant in the auto-motive sector. The company employs 11,000 workers spread throughout 10 manufacturing facilities, three technological laboratories, fi ve application centers, and two distribution warehouses. “This was an important evolution, since we started off as mere technology ap-plicators and became developers of technology. Ano-ther fact is that two thirds of our business was with

GM. Today, our commitment to the company does not surpass one third of our business.”

The South American division accounts for 8% of the corporation’s revenues. Last year, according to the company’s fi nancial balance sheets, it registered net revenues of US$ 16 billion, and profi ts of US$ 1.1 billion, a result that has certainly helped it avoid the turbulences of the past. “Within the next two years, we expect to account for 10% of the total business. It will be an interesting fi ght, because other regions are also growing.” Depending on the adolescent, there will certainly be enough breath to fi ght for this growth.

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DezotoBrazilian-born Adílson Dezoto, responsible for managing the plant in Resende, RJ, joined the board of MAN to become responsible for the production and logistics area of MAN Latin America. Dezoto replaces German-born Carsten Intra who, after spending a period of three years in Brazil, has been assigned to lead production and logistics at MAN Truck and Bus, headquartered in Munich, Germany.

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Ribeiro Rafael Ribeiro is the new person responsible for the fi nancial

department at Manserv. The economist will manage revenues, treasury, accounts payable and receivable, as well

as insurance.

Luís CuriChery has taken over its operations in the country and announced a new board. Kong Fan Long, president, Du Weiqiang, vice president, Wu Dejun, vice president and

industrial director, and Luís Curi, vice president, CEO and commercial director. The company is setting up a

manufacturing facility in Jacareí, SP.

JulianelliFernando Julianelli became marketing director

at MMC, which represents Mitsubishi in the country. The advertising professional worked in projects for the vehicle manufacturer a number

of times while employed at different advertising agencies.

GonçalvesAbraciclo has a new executive director. On

March 1, José Eduardo Ramos Gonçalves succeeded Moacyr Alberto Paes, who

was named assistant to the president.

BarbieriChanges at Iveco: Bárbara Barbieri replaced

Orlando Merluzzi as director of development and management.

LimaRhodia, a manufacturer of engineering plastics for a number of sectors, including automotive,

has a new president for Latin America this month. Osni de Lima, a business administration

graduate, and vice president of human resources, will take over the position left open by Marcos

de Marchi, who joined Elekeiroz, another chemical producer.

FehrenbachBosch announced changes for its senior

management in Germany. Franz Fehrenbach becomes president of the administrative board.

He will replace Hermann Scholl, Volkmar Denner was named president of Robert Bosch, and

Dirk Hoheisel joined the executive board and is responsible for the Automotive Electronics

and Car Multimedia divisions. Changes will be effective July 1st.

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Inaugurations:

VolkswagenVolkswagen’s Regional Training Center in São José do Rio Preto, SP, destined for its dealer network, is already in operation. This is the company’s second unit of this type in the country, part of a R$ 15 million investment in seven centers. The remaining fi ve centers should be inaugurated by the end of this year.

FirestoneThe second unit of the Firestone do Brasil CarClub was inaugurated in Santo André, SP. The fi rst unit was established in São Paulo, SP, in August. The objective of the units is to offer automotive services in the light vehicles segment and improve the performance of the dealers.

Mercedes-BenzThe offi cial re-inauguration of the Mercedes-Benz Juiz de Fora unit in the state of Minas Gerais is scheduled to occur on May 3, a Wednesday.

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Business

CEVACEVA Logistics renewed its contract with Renault do Brasil for an additional two years. The deal involves receiving, storing, and consolidating automotive parts for shipment to France, Mexico, Romania, and South America. The operations involve seventeen employees in sea shipments in more than 240 thousand m³ of processed parts per year.

CarglassCarglass, which has 65 stores spread throughout the country, collected more than 2 thousand tons of broken windshields in 2011. The initiative is part of the Ecoglass Project, which forwards the material to a specialized company that manages to recycle 90% of everything it receives.

PSAPSA Peugeot Citroën successfully concluded a capital increase generated from its association with GM: € 999 million.

DaimlerDaimler acknowledged its Japanese suppliers for their efforts after the natural disasters in 2011.

VisteonVisteon sold its automotive illumination division to the Varroc group, from India, The company supplies automotive parts and the deal was valued at US$ 92 million, in cash.

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Dealer network

Awards Internet

Harley-DavidsonHarley-Davidson opened a new dealer in São Paulo. ABA is located in Av. Marquês de São

Vicente, in the west side of São Paulo, SP.

IrosIros Motos inaugurated two dealers in March, in

Araraquara, SP. One is downtown and the other in the Jaraguá Shopping center.

CarburgoCarburgo, a VW dealer in the state of Rio Grande do

Sul, is preparing to celebrate its 50th anniversary. Customers can report their experiences with the dealer by visiting the company’s web site: http://

www.carburgo.com.br/suahistoria and be eligible to win a number of prizes and participate in a book

about the event.

EurobikeEurobike inaugurated a complex with seven of the

brand’s luxury vehicles dealers in São José do Rio Preto, SP: Audi, BMW, BMW Motorrad, MINI, Land

Rover, Porsche and Volvo.

Global standard Ford will have a new global architecture standard

for its dealers known as the Trustmark. It will be used in new and reformed dealerships.

RenaultAkzoNobel celebrates increased adoption of the

Sakkens automotive repainting products and services by Renault dealers.

HoneywellHoneywell Turbo Technologies received the Best

Engineering Development 2011 Award for the supply of the Garrett variable geometry turbo for

light and medium Hino trucks, a company belonging to the Toyota group of companies in Japan. This was

the third time the company won the award.

TuzziTuzzi, from São Joaquim da Barra, SP, received

from AGCO the ACRE award for Cost Reduction Expectation for its efforts in 2011.

FiatFor the fifth year in a row, Fiat was chosen as the manufacturer with products sold in Europe with

the smallest level of CO2 emissions. The study was conducted by the consulting firm Jato Dynamics

based on 2001 data.

FordFord Brazil is making the Meu Primeiro Carro (My First Car) available to its customers that use smartphones equipped with the Android system. The application contains basic care and documentation information.

AudiAudi Brazil launched a free application for the iPhone and the iPad in the Apple Store containing information about the brand and pictures in 360º.

Mercedes-BenzMercedes-Benz is presenting an internet advertising campaign to divulge its entire 2012 truck line. In the first day of the campaign, March 15, there were more than 120 million page views

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Launches

GrandCabrioGrupo Via Italia, the offi cial Maserati importer, announced the arrival of the GranCabrio Sport

model in Brazil: R$ 920 mil.

Ram 2500Chrysler is launching in Brazil its

Ram 2500 pickup line, which is no longer called Dodge: R$ 150 mil.

ContinentalThe headquarters of Continental Pneus developed

a specifi c model of tire for electric and hybrid vehicles, the Conti.eContact: very low rolling

resistance.

MotorcraftFord trucks presented the Arla 32 additive with its own brand for the aftermarket, Motorcraft, which

was developed by Cummins.

LincolnThe Lincoln MKZ 2013 was presented by Ford at the New York Auto Show as the re-invention of its luxury brand. The sedan has the biggest sunroof in its category: 1.4 m².

L200Mitsubishi expanded its L200 Triton line with the addition of three new versions: GLS, GLX and GL.

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75 April 2012

Passport to a happy union

We are bombarded daily by offers of new and used vehicles in newspapers, magazines, the Internet, radio, and TV. It is estimated that close to 50 different brands and more than 600 different vehicle models fight for the preference of Brazilian consumers.

Specialized journalists are an important part in the chain that influences the decisions of the poten-tial buyers. These professionals participate in product launches and have the opportunity to test drive the new vehicles.

Therefore, in addition to the advertisements, there is also the work resulting from putting together per-formance and content analysis, as well as reporting on how the vehicles perform when compared to their respective direct competitors.

This represents an interesting form for the readers to get to know the product and build their own conclusions before deciding on the purchase. After all, the ac-quisition of vehicle is seen by the majority as the second step in the scale of importance of consumer goods, behind only the acquisition of a house.

In addition, the choice of the automobile deter-mines a medium and long-term experience and every owner wants a relationship of significant satisfaction while the marriage lasts. It can also represent the pro-tection of part of the capital invested when the time comes to resell or exchange the vehicle for another car.

In the US, 80% of the consumers that visit the dealers take along information about the vehicle they want to buy, usually extracted from the sites of the vehicle manufacturers. This level of maturity is still not present here. However, we are quickly approaching it. It is important to note that the contact with experienced

Francisco Satkunas . conselheiro da SAE Brasil

The acquisition of the vehicle is seen by the majority of

people as the second most important

step in the scale of consumer goods

Article

salespeople at the dealers helps solve doubts, but it can also make the consumer succumb to the anxiety of immediately buying whatever car is available and, in the process, acquire accessories, guarantees, and other services that transform themselves into needs.

The high dose of emotion that surrounds the pur-chasing decision is a signal that it is important to preserve the freedom of choice about what, in reality, should be acquired. In order to achieve this, the sim-ple static evaluation of an automobile, through tes-ting the ease of entry and exit of the vehicle, holding on to the steering wheel, accessing the commands, and verifying the cabin space and luggage compart-

ment, is not enough.The test drive is fundamental

to obtain a dynamic notion about an unknown vehicle. It enables the consumer to feel its general beha-vior, as well as the functioning of the accessories. Items such as turn signal, horn, windshield wipers, seat comfort and position while driving, should be tested.

Some more experienced drivers are accustomed to renting an iden-

tical vehicle in order to test it for a longer period. The certainty of the best choice fully justifies the acqui-sition.

The ABS brake is an important equipment that must be tested. The safety item will soon become standard equipment. Few drivers have had the op-portunity to use and experience this item. The sa-lesperson at a dealer would usually not agree with this test during the short test drives that are usually conducted.

Therefore, each time a new or used car is being acquired, do the test drive. Face it as a passport for a future happy union.

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