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OEMs in South America will be cautious in new investments besides positive long term.

January 8, 2009

Analysis of:Honda to delay production in Argentina | biz.yahoo.com

The news just issued regarding to Honda decision on their new plant in Argentina shows how careful OEMs will have to be in order to get more with less in scarce cash times. New products launch will probably not put in jeopardy but important capacity increases will need to wait for better times. The South American market has steadily grown in the last 3 years up to last October, but the global financial crisis is strongly affecting durable goods demand in way it is difficult to foresee how long. Emphasis according to the OEMs perceived strategy is to speed up new product launches in order to stay competitive and postpone capacity increases andor new plants.

OEMs in South America will be cautious in new investments besides positive long term.

January 8, 2009

Analysis of:Honda to delay production in Argentina | biz.yahoo.com

The news just issued regarding to Honda decision on their new plant in Argentina shows how careful OEMs will have to be in order to get more with less in scarce cash times.New products launch will probably not put in jeopardy but important capacity increases will need to wait for better times. The South American market has steadily grown in the last 3 years up to last October, but the global financial crisis is strongly affecting durable goods demand in way it is difficult to foresee how long. Emphasis according to the OEMs perceived strategy is to speed up new product launches in order to stay competitive and postpone capacity increases andor new plants.

Better conditions for local Tier 2 and 3 to invest are key for a competitve automotive industry

November 7, 2007

Analysis of:BRAZIL’S RECORD-BREAKING AUTOMOBILE DEMAND: CAN SUPPLY KEEP PACE? | tendencias.infoamericas.com

According to Sindipeças, the autoparts Assotiation in Brazil, in 2006 80.9% of the investment were made by multinational subsidiaries installed in the country. Considering that 80% of Tier 2 and 3 suppliers are mostly  Brazilian family owned companies , it can be seen that those companies did not have acess to cheap money to invest in increasing productivity and/or modern new technologies. The autoparts Trade balance Jan to August 2007 shows by the first time in many years that Brazil is importing more than exporting. Exports were at the level of 5.886 Bi US$ being stable in the last 2 years, while imports increased more than 20% to the level of 5.895 BiUS$. Vehicle OEMs had to import more parts in order to keep in pace with a more sofisticated market aiming to have better and more efficient products. It is imperative that conditions are created in order the local supply base to have access to similar capital cost of their competitors in the rest of the world.

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