1. mercado de autopartes en brasil, roberto pagano

1,815 views

Published on

Published in: Travel, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,815
On SlideShare
0
From Embeds
0
Number of Embeds
522
Actions
Shares
0
Downloads
35
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

1. mercado de autopartes en brasil, roberto pagano

  1. 1. 1 BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  2. 2. 2 BRAZILIAN OEM AUTOPARTS SCENARIO 1. Global automotive market forecast • Worldwide forecast (2012-2016) • South America forecast (2013-2017) 2. Brazilian automotive outlines - 2012 • Automotive macro data • Investments for automotive • Autovehicles production & sales • Autovehicles import / export • Carmakers ranking • Carmakers plants (current and new entries) 3. Brazilian automotive market trends • Sales & production trends • Main key factors • Brazilian forecast (2013-2017) 4. Brazilian autoparts industry - 2012 • Autoparts industry performance • Sales & investments • Companies profile • Autoparts import / export & trade balance • Aftermarket • Financial indices • Main key factors 5. Foreign autoparts suppliers coming in Brazil • Opportunities • Barriers • Business models • Needed profiles 6. Debriefing • Conclusions • Questions & Answers Purposes ✓ measure the Brazilian automotive market and to evaluate the market trends ✓ map the current OEM Brazilian autoparts industry and evaluate its evolution ✓ underline the key factors for a foreign autoparts company coming in Brazil Target ✓ foreign autoparts companies for developing OEM business in Brazil Presentation Summary
  3. 3. 3 1. Global automotive market forecast • Worldwide forecast (2012-2016) • South America forecast (2013-2017) BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  4. 4. 4 Asia 40,8 50% Europe 19,2 24% North America 14,9 18% South America 4,5 6% Africa / M.E. 2,0 2% Asia 50,1 52% Europe 21,1 22% North America 17,5 18% South America 5,5 6% Africa / M.E. 2,4 2% Asia 34,1 42% Europe 18,7 23% North America 17,5 22% South America 5,8 7% Africa / M.E. 4,6 6% Asia 43,4 45% Europe 20,3 21% North America 19,6 21% South America 6,9 7% Africa / M.E. 5,5 6% 1 - Global automotive market forecast Worldwide forecast (2012-2016) Source: IHS – OICA - ROMA 20162012 0 10 20 30 40 50 2012 2013 2014 2015 2016 Worlwide sales (million units) Asia Europe North America South America Africa / M.E. 2102 2016 WORLDWIDE 81 million 95 million +18% SOUTH AMERICA 5,8 million 6,9 million +19% 2102 2016 WORLDWIDE 82 million 97 million +19% SOUTH AMERICA 4,5 million 5,5 million +22%
  5. 5. 51 - Global automotive market forecast South America forecast (2013-2017) Source: IHS - ROMA 0 1 2 3 4 5 6 7 2013 2014 2015 2016 2017 South America produc on (million units) Others C segment B segment A segment  According to IHS, the segmentation of the South America production in 2013-2017 will be as shown at the side, where:  A segment + 115% up to 0,8 million units in 2017  B segment + 15% up to 3,1 million units in 2017  C segment + 36% up to 1,6 million units in 2017  Others + 19% up to 0,2 million units in 2017 0,0 1,0 2,0 3,0 4,0 Brazil Argen na Chile Colombia Peru Venezuela Equador Paraguay Bolivia million units Domes c sales 2012 2011 0,0 1,0 2,0 3,0 4,0 Brazil Argen na Chile Colombia Peru Venezuela Equador Paraguay Bolivia million units Produc on 2012 2011
  6. 6. 6 2. Brazilian automotive outlines - 2012 • Automotive macro data • Investments for automotive • Autovehicles production & sales • Autovehicles import / export • Carmakers ranking • Carmakers plants (current and new entries) BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  7. 7. 72 - Brazilian automotive market outlines - 2012 Automotive macro data  ANFAVEA members  AGCO do BRASIL  AGRALE  CAOA Hyundai  CATERPILLAR BRASIL  CNH LATIN AMERICA  DAF PACCAR  FIAT AUTOMOVEIS  FORD MOTOR COMPANY  GENERAL MOTORS do BRASIL  HONDA AUTOMOVEIS do BRASIL  HYUNDAI MOTOR BRASIL  INTERNATIONAL  IVECO LATIN AMERICA  JOHN DEERE BRASIL  KARMANN GHIA  KOMATSU do BRASIL  MAHINDRA Bramont  MAN LATIN AMERICA  MERCEDES-BENZ do BRASIL  MITSUBISHI – MMC do BRASIL  NISSAN do BRASIL  PEUGEOT CITROEN do BRASIL  RENAULT do BRASIL  SCANIA LATIN AMERICA  TOYOTA do BRASIL  VALTRA do BRASIL  VOLKSWAGEN do BRASIL  VOLVO do BRASIL Source: ANFAVEA  Companies  28 carmakers with 58 plants  over 500 autoparts main industries  over 5100 dealers  sectorial ≈ 200.000 companies  Production capacity  Autovehicles: 4,5 million  Agricultural: 110 thousand  Economics  Revenues: US$ 107 billion  GDP share: 5% x total & 21% x industrial  Tributes generation: US$ 25 billion  Foreign market: export: US$ 23 billion – import: US$ 33 billion  Investments: US$ 68 billion  Employment: 1,5 million people  Fleet  over 38 million vehicles operating  with a ratio of 5 habitants per vehicles (being US = 1,2 and Europe = 1,8)  with an average fleet age of 8,8 years: 0% 10% 20% 30% 40% 50% over 20 years old 16 to 20 years old 6 to 15 years old up to 5 years old – passenger cars light commercials trucks bus 1990 1995 2000 2005 2010 40 – 20 – 10 – 30 – 0 – 1960 VEHICLES FLEET
  8. 8. 8 Source: ANFAVEA 2 - Brazilian automotive market outlines - 2012 Investments for automotive – 1980/2012 0 1.000 2.000 3.000 4.000 5.000 6.000 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Automo ve Investments (US$ million) The investments planned in 2013 ÷ 2015 would be significantly higher, mainly for:  Carmakers: new plants or capacity improvement & new vehicles  Autoparts: capacity improvement & new products  New plants of new foreign carmakers and suppliers (mainly from China)
  9. 9. 9 795.065 21% x sales 442.075 13% x product 2.900.542 87% x product 857.901 24% x sales 578.728 17% x product 2.853.865 83% x product 3.432.593 Internal Market Sales 3.633.248 Import Export Production BRAZILIAN AUTOMOTIVE 2012 BRAZILIAN AUTOMOTIVE 2011 Import Export Production Sales Internal Market3.342.617 3.802.071 2 - Brazilian automotive market outlines – 2012 Autovehicles production & sales +2% +5%-3% -7%-7% Source: ANFAVEA WORLDWIDE AUTOMOTIVE RANKING  7th producer  4th domestic market
  10. 10. 102 - Brazilian automotive market outlines – 2012 Autovehicles production & sales After years of good growth, the sales slowed down considerably since 2011 Source: ANFAVEA 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 2006 2007 2008 2009 2010 2011 2012 HISTORICAL SALES (million units) and CAGR (Compounded Annual Growth Rate) + 16% + 3%
  11. 11. 112 - Brazilian automotive market outlines – 2012 Autovehicles production & sales Source: ROLAND BERGER – ROMA REASONS FOR CURRENT MARKET WEAKNESSES ECONOMIC SLOWDOWN FINANCING RESTRICTION INCREASED USED CARS MARKET EURO 5 IMPLEMENTATION NOx and PM emissions standards for diesel vehicles in Brazil  GDP growth have come to a stall on the recent past  Reflects global financial situation  Unfavourable financing conditions due to global crisis  Higher interest rate for car credits  Increasing used cars market in direct competition with new cars market  Residual price uncertainties In Jan 2012 the standards moved from Euro3 to Euro5, with:  a strong pre-buy effect in 2011  consequently a lower trucks demand in 2012 2010 2011 2012 GDP – Growth Brazil Car credit (R$ million) Used cars market (million units) However, the 2013 first half was the historical best half, with a sale of 1.8 million units, 4.8% more than in the same period of last year. IMPACT
  12. 12. 122 - Brazilian automotive market outlines – 2012 Autovehicles import / export 0 100.000 200.000 300.000 400.000 500.000 600.000 Passenger Cars Light Commercials Trucks Bus Import & Export 2012 (units) IMPORT EXPORT  The balance continues to worsen, confirming such trend since 2008.  The import was supported by the success of the Korean and Chinese vehicles and of the SUV’s.  The export was supported mainly by the sales in Latin America. The negative balance was one of the main factor of the production downturn in 2012 Source: ANFAVEA 0 100.000 200.000 300.000 400.000 500.000 600.000 700.000 800.000 900.000 1.000.000 2012 2011 Import & Export (units) IMPORT EXPORT
  13. 13. 13 Sources: ANFAVEA – IG CARROS 2 - Brazilian automotive market outlines - 2012 Carmakers ranking – sales 2,0% 0,4% 0,5% 1,1% 1,7% 2,9% 3,0% 3,1% 3,7% 4,0% 6,6% 8,9% 17,7% 21,3% 23,1% 0% 5% 10% 15% 20% 25% Others CHERY JAC KIA MITSUBISHI NISSAN HYUNDAI TOYOTA HONDA PSA RENAULT FORD GM VW-AUDI FIAT Passenger Cars & Light Commercials  Fiat + VW + GM (the “Big Threes”) together account for 62% of sales (it was 75% in 2006).  Fiat confirms its leadership in sales for the 11th consecutive year.  VW Gol is the best-selling “car family” (and the VW Gol hatch is the best-seller car for the 25th consecutive year). 0 100.000 200.000 300.000 400.000 500.000 Ford Ka GM Cobalt Ford Fiesta GM Celta GM Corsa Renault Logan VW Fox Fiat Uno Fiat Palio VW Gol Best-selling “car families” “Big Threes” = 62%
  14. 14. 14 Sources: ANFAVEA – IG CARROS 2 - Brazilian automotive market outlines - 2012 Carmakers ranking – production Passenger cars & Light commercials  FIAT + VW + GM (the “Big Threes”) together account for 69% of cars production (75% in 2006).  MAN + MERCEDES + FORD together account for 70% of trucks & bus production (76% in 2006).  Note the merge, occurred in end 2008, of the trucks & bus operations between MAN and VW. Trucks & Bus 0,2% 1,0% 1,2% 1,6% 2,0% 3,1% 4,2% 7,8% 8,4% 19,0% 25,3% 26,3% 0% 5% 10% 15% 20% 25% 30% Others Nissan Mitsubishi Hyundai Toyota PSA Honda Renault Ford GM Fiat VW 0,3% 3,3% 7,1% 9,2% 11,4% 13,8% 26,9% 28,1% 0% 5% 10% 15% 20% 25% 30% Others Agrale Iveco Scania Volvo Ford Mercedes MAN-VW
  15. 15. 15 Source: ROMA 2 - Brazilian automotive market outlines - 2012 Carmakers plants (current and new entries) RIO GRANDE DO SUL = 9 + 1 AGCO INTERNATIONAL AGCO JOHN DEERE AGCO JOHN DEERE AGRALE TOYOTA GM SHIYAN PARANÁ = 5 + 2 CATERPILLAR VW CNH VOLVO FIAT CATERPILLAR RENAULT PACCAR-DAF NISSAN MINAS GERAIS = 4 + 1 CNH MERCEDES FIAT CNH IVECO BAHIA = 1 + 2 FORD JAC MOTORS JOHN DEERE CEARÁ = 1 + 0 FORD (TROLLER) PERNAMBUCO = 1 + 4 GM FIAT XCMG FIAT SHAANXI HEAVY DUTY GOIÁS = 3 + 1 HYNDAI CAOA MITSUBISHI JOHN DEERE SUZUKI AMAZONAS = 1 + 0 MAHINDRA RIO DE JANEIRO = 2 + 3 MAN NISSAN PSA FOTON HYUNDAI MACHINERY SANTA CATARINA = 0 + 2 BMW SINOTRUCK ESPIRITO SANTO = 0 + 1 SSANGYONG/CHANGAN/HAIMA SÃO PAULO = 29 + 9 AGCO AGCO CATERPILLAR CNH CNH FORD FORD FORD GM GM GM GM GM HONDA HYUNDAI IVECO JOHN DEERE KARMANN GHIA KOMATSU KOMATSU MERCEDES MERCEDES SCANIA TOYOTA TOYOTA TOYOTA VW VW VW CHERY DOOSAN INFRACORE JCB JOHN DEERE JOHN DEERE / HITACHI KIA SANY GROUP SCANIA TOYOTA SERGIPE = 0 + 1 AMSIA ≈ 1.000 Km 0 5 10 15 20 25 30 35 40 SP MG PR SC RS GO RJ BA PE CE ES SE AM Carmakers plants EXISTING 2012 NEW PLANTS TOTAL FORECAST IN 2016: 85 plants  58 existing plants (updated end 2012)  27 new plants (planned 2013-2016):  7 from China:  Chery • Foton • JAC • Shaanxi • Shiyan • Sinotruck • Ssangyong  2 from US:  Amsia • Paccar DAF  1 from Germany:  BMW  1 from Korea:  Kia  1 from Japan:  Suzuki
  16. 16. 16 3. Brazilian automotive market trends • Automotive Sales & Production trends • Main key factors • Brazilian forecast (2013-2017) BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  17. 17. 173 - Brazilian automotive market trends Sales & Production trends Source: ROLAND BERGER – FMI – BANCO CENTRAL - IBGE The future growth of the Brazilian automotive industry is based on three fundamental trends 1 ECONOMIC DEVELOPMENT The GDP in Brazil will return to former growth, mainly driven by stable inflation and controlled interest rates 2 INCREASING SPENDEABLE INCOME The positive economic development will increase the number of households that can afford to buy a car 3 MEGA-EVENTS & MEGA-CONSTRUCTIONS The upcoming events (like World Football Cup and Olympic Games) and energy and infrastructure investments will increase demand in the next years 1) 1) PIB = GDP – IPCA = inflation rate – SELIC = official interest rate 2) Number of householders with spending power > R$ 28.000 per year 0% 2% 4% 6% 8% 10% 12% 14% jan/11 PIB IPCA SELIC 2011 2014e2013e2012 AUTOMOTIVE SPENDING POWER (million households) 2)
  18. 18. 183 - Brazilian automotive market trends Main key factors Source: ROLAND BERGER – ROMA  Increase of IPI (“industrial product tax”) for all vehicles sales by 30 points, with reduction up to 0 for locally produced vehicles.  Re-negotiation of free trade agreements with foreign Countries (Mexico, Argentina, etc.).  Lower interest rates for FINAME financing with local content requirements & better conditions for financing the vehicles purchase (ex. commercial vehicles, trucks):  Higher competition and newcomings will imply wider offer at lower prices.  Forecast of sustained demand from the emerging middle class.  Establishing programs to encourage exports. 1) Salary including benefits and social charges  High and strongly increasing labour cost.  Lower productivity as other automotive Countries.  High cost of “doing business in Brazil”, like energy, logistics, bureaucracy, taxes, … (the so-called “custo Brasil”):  Unfavourable exchange rate.  Heavy burden on import taxes and significantly complex operations for importing.  Uncertainties about the solidity of the real economy in the coming years.
  19. 19. 191 - Global automotive market forecast Brazilian forecast (2013-2017) Source: IHS – OICA - ROMA 2102 2017 SOUTH AMERICA 5,9 million 7,2 million +23% BRAZIL 3,7 million 4,4 million +21% 0 1 2 3 4 5 6 7 8 2013 2014 2015 2016 2017 Brazilian sales (million units) South America Brazil 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 5,0 2013 2014 2015 2016 2017 Brazilian sales (million units) Others C segment B segment A segment 2102 2017 SOUTH AMERICA 4,5 million 5,8 million +30% BRAZIL 3,3 million 4,3 million +31% 0 1 2 3 4 5 6 7 2013 2014 2015 2016 2017 South America produc on (million units) Others C segment B segment A segment
  20. 20. 20 4. Brazilian autoparts industry – 2012 • Autoparts industry performance • Sales & investments • Companies profile • Autoparts import / export & trade balance • Aftermarket • Financial indices • Main key factors BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  21. 21. 21 Source: SINDIPEÇAS 4 - Brazilian autoparts industry - 2012 Autoparts industry performance 1) SINDIPEÇAS: Sindicato Nacional da Industria de Componentes para Veículos Automotores 2) ABIPEÇAS: Associação Brasileira da Industria de Autopeças  Companies  over 500 companies associated to SINDIPEÇAS1) and ABIPEÇAS2 •over 700 autoparts main plants • sectorial ≈ 200.000 companies  Economics  Revenues: US$ 42 billion  69% assemblers OEM’s  15% aftermarket  9% export  7% intrassetorial • Foreign market:  export: US$ 10,4 billion  import: US$ 16,3 billion • Investments: US$ 1,9 billion (4,5% on sales) • Employment: total 218 thousand people  hourly workers: 142 thousand people  white collars: 76 thousand people 69% 15% 9% 7% 2012 SALES PER DESTINATION Carmakers A ermarket Exports Intrassetorial 0 4 8 12 16 20 2008 2009 2010 2011 2012 TRADE BALANCE (US$ billion FOB) EXPORT IMPORT 0 50 100 150 200 250 2008 2009 2010 2011 2012 EMPLOYEES (thousand workers) White Collars Hourly Workers +18% +8% +8%  OEM autoparts market forecast, without export (R$ billion)
  22. 22. 224 - Brazilian autoparts industry - 2012 Sales & investments __________________________________________________________________________________________________________ _ NET SALES FOREIGN CAPITAL NATIONA L CAPITAL 76%48% 52% 24% 72% 28% 48% 52% 86% 14% 66% 34% 1994 2002 2012  The national industry is losing strength and is reacting by investing more 2012 net sales: US$ 42 billion 2012 investments: US$ 1,9 billion __________________________________________________________________________________________________________ _ INVESTMENTS __________________________________________________________________________________________________________ _ __________________________________________________________________________________________________________ _ Source: SINDIPEÇAS
  23. 23. 23 0 200 400 600 800 1.000 1.200 1.400 1.600 1.800 22) Master 21) Autometal 20) Tower 19) Sifco 18) Fras-Le 17) Takata Petri 16) Tenneco 15) Moura 14) Plascar 13) Suspensys 12) Aethra 11) Vipal 10) TRW 9) Cummins 8) Delphi 7) ZF 6) Maxion 5) Valeo 4) Mahle 3) Magne Marelli 2) Eaton 1) Bosch Source: Exame Maiores e Melhores 2012 4 - Brazilian autoparts industry - 2012 Companies profile  The top 10 companies together account for 24% of total market revenues.  The top 22 companies together account for 33% of total market revenues. Only 22 autoparts companies achieve each one a net revenue higher than US$ 100 million: Just 5 of the first 22 companies are controlled by national capital (# 11 - 12 – 13 - 19 – 22)
  24. 24. 24 10,2% 4,0% 7,5% 3,1% 19,6% 9,5% 16,5% 10,2% 22,1% 20,6% 10,0% 16,6% 5,0% 7,1% 9,0% 29,0% 2001 2011 up to R$ 3.000 R$ 3.000 to R$ 5.000 R$ 5.000 to R$ 10.000 R$ 10.000 to R$ 20.000 R$ 20.000 to R$ 50.000 R$ 50.000 to R$ 100.000 R$ 100.000 to R$ 150.000 higher than R$ 150.000 4 - Brazilian autoparts industry - 2012 Companies profile Number of companies by level of revenues Revenues of small and medium sized companies are shrinking, while large companies grow. Source: SINDIPEÇAS 16,6% 10,2% 20,6% 16,6% 7,1% 24,6% 4,4% 0% 5% 10% 15% 20% 25% 30% up to 5 5 to 10 10 to 25 25 to 50 50 to 75 75 to 100 over 100 Revenues(US$million) 0% 10% 20% 30% 40% small medium large Classifying small / medium / large sized companies using the usual thresholds of 10 and 50 US$ million of revenues, the companies distribution is rather balanced. Evolution
  25. 25. 254 - Brazilian autoparts industry - 2012 Companies profile Distribution by employees number Classifying small / medium / large sized companies using the usual thresholds of 50 and 500 employees, the medium companies are more than half. Note that only 6,5% are companies with more than 2000 employees. 5,0% 8,8% 18,6% 18,0% 21,3% 13,4% 8,4% 3,8% 2,7% 0% 5% 10% 15% 20% 25% up to 30 30 to 60 60 to 125 125 to 250 250 to 500 500 to 1000 1000 to 2000 2000 to 4000 over 4000 (employees) 0% 10% 20% 30% 40% 50% 60% 70% small medium large Source: SINDIPEÇAS Quality Certifications 0 50 100 150 200 250 300 350 AVSQ BS 8800 / OHSAS EAQF ISO 14001 ISO 9011 ISO TS 16949 SA 8000 VDA 6.1/6.3/6.4 Number of cer fica ons 945 certifications 106 in process Quality certification is a prerequisite for suppliers
  26. 26. 264 - Brazilian autoparts industry - 2012 Autoparts import / export & trade balance -6 -3 0 3 6 9 12 15 18 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 (US$billion) IMPORT EXPORT BALANCE  With the global crisis in 2008, Brazil became the destination for autoparts produced abroad, such as Germany, China and Korea, which worsened in later years reaching negative balance of US$ 5,8 billion in 2012.  Recently the Brazilian Government launched a new automotive regime, favoring a higher content of local components. Source: SINDIPEÇAS
  27. 27. 274 - Brazilian autoparts industry - 2012 Autoparts import / export & trade balance Source: SINDIPEÇAS representing 94% of the total exportations List of the first 20 destinations: representing 93% of the total importations List of the first 20 origins: 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 Poland Austria Indonesia Czech Republic Turkey Romania UK India Spain Sweden Mexico Italy Thailand South Korea France Argen na China Germany Japan US (US$ billion) IMPORT 2012 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 India Sweden Russia Uruguay Paraguay France Peru UK Italy Thailand China South Africa Colombia Chile Netherland Venezuela Germany Mexico US Argen na (US$ billion) EXPORT 2012 !2,5%!2,0%!1,5%!1,0%!0,5% 0,0% US% Spain% Sweden% Italy% Thailand% France% Germany% South%Korea% China% Japan% !%TRADE%% BALANCE%
  28. 28. 284 - Brazilian autoparts industry - 2012 Aftermarket Source: ROLAND BERGER - PIT STOP OES IAM 2010 2011 2012 2013 2014 2015 2016 2017 6,4 7,3 8,2 9,1 10,0 10,8 11,7 12,6 Brazilian automotive aftermarket forecast 1) (EUR billion) 1) excluding tires GROWTH DRIVERS  Growing users spendable income, enabling more maintenance and repairs  Grow of the fleet at > 5% per year  Higher-value fleet with more features and options  Regulatory controls and warranty changes  Changes in users behaviour towards more preventive maintenance AFTERMARKET CHARACTERISTICS  Despite the growing of the OES share, the aftermarket continues to be dominated by the IAMs.  The data above are referred to the “official scenario”, but there is a big “parallel independent” market, which size is estimated by other sources in up to the double than the official data. Such parallel market is supplied by small local producers and by imported parts (mainly from Far East).  Sizing figure: 35.000 retailers, 120.000 workshops and 1 million direct employees.
  29. 29. 294 - Brazilian autoparts industry - 2012 Financial indices NOTE: Financial indices The following informations have been elaborated by ROMA from public sources and also using data from an economical and financial study accomplished by Serasa Experian, who analysed the combined financial statements in US dollars, from 2009 to 2011, of 277 main companies associated to Sindipeças and Abipeças, representing around 50% of the total gross revenues in 2011. The following data are showed:  Production cost structure  Profit & Loss  Profit on sales  Financial figures Source: ROMA – SERASA EXPERIAN
  30. 30. 304 - Brazilian autoparts industry - 2012 Financial indices PRODUCTION COST STRUCTURE Source: ROMA – SERASA EXPERIAN Other costs Manpower Materials 0 4% 8% 12% 16% CHANGE IN PRODUCTION COST CHANGE IN PRODUCTION COST Other costs Manpower Materials 16% 12% 8% 4% 0 100% 80% 60% 40% 20% 0 2005 2006 2007 2008 2009 2010 2011 2012 -2% 0% 2% 4% 6% 8% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 PROFIT ON SALES 1,0 1,2 1,4 1,6 1,8 2,0 2009 2010 2011 GROWTH INDEX OPERATING REVENUES GROSS PROFIT OPERATING PROFIT NET INCOME 0% 3% 6% 9% 12% 15% 18% 0 5 10 15 20 25 30 2009 2010 2011 %onrevenues US$billion OPERATING REVENUES % GROSS PROFIT % OPERATING PROFIT % NET INCOME  In spite of • the sustained growth of the revenues (at average rate of 30% per year) and • the maintenance of the gross profit at 14-15% of the revenues, the profitability shows signs of weakening (confirmed by various samples investigated in 2012).
  31. 31. 314 - Brazilian autoparts industry - 2012 Financial indices FINANCIAL FIGURES Source: ROMA – SERASA EXPERIAN 0% 2% 4% 6% 8% 10% 0 300 600 900 1.200 1.500 2009 2010 2011 INVESTMENTS US$ million % on sales 0% 5% 10% 15% 20% 0 500 1.000 1.500 2.000 2.500 2009 2010 2011 LOAN & FINANCING US$ million % on sales 0% 5% 10% 15% 20% 1.000 1.500 2.000 2.500 3.000 2009 2010 2011 WORKING CAPITAL NEEDS US$ million % on sales 2010 2011 50 days 48 days AVERAGE INVENTORY TURNOVER 2010 2011 56 days 55 days AVERAGE PERIOD PURCHASES PAYMENT 2010 2011 47 days 45 days AVERAGE PERIOD SALES COLLECTION 0 2.000 4.000 6.000 8.000 10.000 2009 2010 2011 NET TOTAL DEBT Long term debt Short term debt
  32. 32. 32 Source: ROMA 4 - Brazilian autoparts industry - 2012 Main key factors KEY PRODUCTS EVOLUTION  QUALITY PRODUCTS Products performance and reliability more and more aligned to the international standards.  LEGISLATION Safety and pollution rules will progressively reach the US / European standards.  PRODUCT TRENDS New products share increases, like: • ABS at 100% of production in 2014 (today is 60%) • Air-bag at 100% of production in 2014 (today is 60%) • Air conditioning at more than 90% of production in 2016 (today is 75%) • Electrical power steering will increase significantly in the next years (negligible today) • Engine downsizing and turbo chargers starting from 2016 • Automatic and AMT transmissions will increase significantly in the next years • Infotainment and GPS’s systems will increase significantly in the next years • …
  33. 33. 33 Source: ROMA 4 - Brazilian autoparts industry - 2012 Main key factors COMPANIES PROFILE EVOLUTION Local automotive suppliers have to prepare for the expected growth and at the same time increase efficiency in their operations.  GROWTH • Consider the impact of new local content requirements • Handle increasing products and technologies specifications and requirements • Prepare for the expected growth in production volumes  EFFICIENCY • Price pressure from OEMs • Compensate high increases in labour and other factors cost • Keep indirect structures lean to not harm profitability • Define the right industrial footprint BIGGER & LEANER
  34. 34. 344 - Brazilian autoparts industry - 2012 Main key factors COMPETITION  CURRENT SCENARIO The local supplier park is one of the widest, where are competing American, European and Asian global suppliers, besides the Brazilians. Such global suppliers also tend to provide their non-traditional customers.  NEW COMPETITORS The new incomings OEMs are bringing their home suppliers to Brazil, further increasing local competition. Such new “home suppliers” need to extend the local customer base, to achieve reasonable size and profitability.  PRICE PRESSURE Increasing production cost cannot be passed on to OEMs. The imported parts, from low-cost countries, define the market price.  OEMs POLICY The main OEMs are focusing suppliers with the following profile: • international suppliers with a local reasonable size • certified suppliers: at least ISO14001 (mandatory) and ISO16949 (recommended) • good quality performance together with high competitiveness Source: ROMA
  35. 35. 35 5. Foreign autoparts suppliers coming in Brazil • Opportunities • Barriers • Business models • Needed profiles BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  36. 36. 365. Foreign autoparts suppliers coming in Brazil Opportunities Source: SINDIPEÇAS - ROMA  MARKET GROWTH The automotive suppliers market, without export, will growth up to 15% per year in the next five years.  IMPORTED PARTS Possibility to supply imported parts, despite the customs barriers, for “niche” products. “Niche” products: • technologies not available in Brazil • high competitiveness (= price) • global components, supplied also outside Brazil  NEW SUPPLIERS OEMs are available to insert new suppliers, if competitive. The higher renovation speed of the vehicles models allows to new suppliers participating in bids for new products.
  37. 37. 375. Foreign autoparts suppliers coming in Brazil Barriers Source: ROMA  CULTURAL DIFFERENCES  CUSTOM BARRIERS & IMPORT PROCEDURES  LOGISTICS & SERVICES PROVIDERS  LOCALIZATION & PROXIMITY TO THE CUSTOMER  COMPETITIVENESS vs. “CUSTO BRASIL”  START-UP TIMING vs. BUREAUCRAZY
  38. 38. 385. Foreign autoparts suppliers coming in Brazil Business models Source: ROMA can be planned for autoparts suppliers coming in Brazil, depending of the nature and the target of each supplier. TWO DIFFERENT BUSINESS MODELS  Market analysis to identify the business opportunities.  Constitution of a local company, together with a Brazilian entity (person or company) who will be the legal representative. Such local company will be “commercial & importing”.  Implantation of the organisation of such local company, with:  commercial structure,  technical services for pre/after-sales,  quality services,  logistic structure,  administration services.  Start-up of import and distribution operations.  Depending on the nature of the imported products, gradually the local structure may carry out some additional technical operations, using Brazilian subcontracted suppliers, if any.  Market analysis to identify the business opportunities  Constitution of a local company, together with a Brazilian entity (person or company) who will be the legal representative. Such local company can be “service provider”.  Implantation of the organisation of such local company, with commercial and administration services.  Plan for the establishment of local manufacturing base, which can be realized in two alternative workarounds:  own investment, with resources and competences from the headquarter; or  partnership with a Brazilian company, with homogeneous skills and productive means.  Structuring the operating organization, alone or with the local partner.  Start-up of the local operations, eventually using some semi-finished components coming from the headquarter.The two models above can be complementary
  39. 39. 395. Foreign autoparts suppliers coming in Brazil Business models Source: ROMA Localisation of subcontracted possible operations Start-up: import and distribution Implantation of the import & commercial organisation Start-up: local production Structuring the operating organization Definition of the local industrial base Implantation of the local services organisation Constitution of the local company Market analysis to identify the business opportunities
  40. 40. 405. Foreign autoparts suppliers coming in Brazil Needed profiles  Due to the high local competition, a differential in products or technologies should be provided, in order to offer a real competitive edge to the customer.  At least, a high competence/experience in the automotive supply should be demonstrable, together with a good competitiveness.  Regarding the offered products, the involved manufacturing technologies should be dominated internally.  A best-in-class quality’s organisation and results should be demonstrable in the headquarter organization, together with the willing to transfer the same standards in Brazil.  A local organization should be built up in Brazil, together with an effective support system from the headquarter.  An efficient organization for offers elaboration should be planned, in order to assure quick and professional answers.  The local logistics should be suited to handle rapid delivery systems, like “Just In Time” or “Milk Run”.  For imported components, a local warehouse should be planned, in order to ensure a local stock for contingency. Source: ROMA
  41. 41. 415. Foreign autoparts suppliers coming in Brazil Needed profiles Source: ROMA  Brazil is a complicated country to do business, with its habits and rules that newcomings must understand and assimilate quickly.  Newcomings should be: - open mind and flexible in decision making and operational processes - open to adapt to different management and negotiation methods - available to adapt to different operating speeds - able to enter into the local mentality and make good use of it - determined and focused to the result, but patient - well organized and planned  Business planning and market informations is one of the major factors for the success of the project, together with the obvious competitiveness.  A recent study, made by IPBT (Instituto Brasileiro de Planejamento Tributário) on the recent companies of all sectors, showed that 15% of companies closed in the first year and 42% in the first five years of life, caused by: - 42% lack of planning and market information - 17% tax complexity and bureaucraticy - 15% difficult to access credit and financial investments - 12% high cost and complex management - 7% quarrels between the partners  Due to the complexity of the Brazilian procedures and bureaucracy, a competent organisation should be locally planned. with en efficient link with the headquarter.  In general, the Brazilian is not a good administrator. So it is necessary to pay attention to the financial and operating management.
  42. 42. 42 6. Debriefing • Conclusions • Questions & Answers BRAZILIAN OEM AUTOPARTS SCENARIO Elaborated by: ROBERTO PAGANO (Roma Consulting) July 2013
  43. 43. 436. Debriefing Conclusions Source: ROMA + −  Brazilian automotive market continues to grow, sustained by good economic outlook.  The local autoparts market will grow even more.  Brazilian government is acting to promote local production.  OEMs privilege international suppliers with reasonable size and high competitiveness.  Quality levels are aligning to international standards.  Wide competition and high pressure on costs / prices.  Good opportunities for newcomings to enter Brazil.  Doing business in Brazil is not easy (but 72% of sales is made by foreign-controlled suppliers). Foreign autoparts suppliers coming in Brazil
  44. 44. 446. Debriefing Questions & Answers ROBERTO PAGANO ROMA CONSULTING ASSESSORIA COMERCIAL LTDA. Tel. +55.19.8183.3444 – Email roberto.pagano@romaconsulting.biz

×