Investment in vehicle production rises $ 5.2 billion

The year 2013 promise not to confirm the record sales expected by the industry. On the other hand, was marked by the profusion of new projects launched by automakers already installed or who are coming to Brazil. In total, investments announced during the year totaled R $ 5.2 billion, between projects of new production lines and the arrival-or-return of car brands today like the imported segment premium brands Mercedes-Benz, Audi and Jaguar Land Rover.
The arrival of these factories is a victory to Government plans to attract investments and reduce the technological gap of cars produced in the country through an automotive regime that restricts the entry of imported. However, raises the risk of overcapacity in the industry, at a time when the demand for automobiles loses its force.
The projects announced in 2013 add an annual production capacity of 230 thousand cars, plus other 31 thousand truckloads of two plants that will be built by Chinese automakers Foton and Shacman in Guaíba (RS), and Tatuí (SP), respectively. Include a new line of engines, confirmed last month by the Chinese Chery also, with additional investments of $ 130 million in Jacareí (SP). In the city, the brand also builds a compact plant.
A few times, the country has had so many investments confirmed in such a short space of time in the sector. Three of these projects-Audi, Mercedes-Benz and Volkswagen, on nationalisation of the new generation of Golf (see chart above)-were announced at an interval of just 17 days between the end of September and early October.
Still others didn't arrive to the federal Government, but have already had memorandum of understanding signed with States, such as the plan of the little known Amsia Motors, Arab capital automaker that can invest up to $ 1 billion in a factory in Sergipe. The same happens with Jaguar Land Rover, which closed the round of new factories this year, announcing earlier this month that will build your in Itatiaia, in southern Rio de Janeiro. The British brand's investments in its first manufacturing operation in the Americas are estimated at $ 750 million.
Before that, Honda in August, decided to double its production capacity of automobiles in Brazil with the construction of a factory in Itirapina, São Paulo interior. At the end of last month, the global head of the Japanese automaker, Takanobu Ito, came to the country to present the project to the President Dilma Rousseff and confirmed that Honda will ride the new generation of compact Fit in place.
Two reasons attract these investments. First, the potential for growth in the consumption of vehicles in the country, especially in the luxury segment, which today represents an insignificant fraction of the market, but with a tendency to double in size over the next five years, according to an estimate of own automakers.
Although vehicle sales in Brazil move to close with the 2013 first fall in ten years, prospects are still optimistic over the long term. The relatively low level of motorization of the Brazilian population-less than, for example, to that of countries like Argentina and Mexico-is the main indicator that there is still room for new developments in consumption, mainly in the interior of the country.
The second reason refers to increasing restrictions imposed by the Government on the importation of cars. With the surcharge of 30 percentage points in the tax on industrialized products (IPI) on imports of vehicles, the marks are forced to produce locally to have competitiveness in the world's fourth largest automotive market. For automakers without factory or investment project in the country, free of extra imports IPI are limited to no more than 4.8 thousand cars per year.
Confirmed investments in 2013 add up the projects that already had been under way since last year, as the BMW factories in Araquari (SC), Nissan in Resende (RJ) and Chery's own in Jacareí-all with inauguration planned until the end of 2014. Apart from that, other automakers increased investment programming in Brazil to cope with the new demands of the new automotive system-collecting them improvements in car technology-and also carry out projects that had already been announced. Fiat, for example, announced in May that will invest $ 15 billion in Brazil between 2013 and 2016, which includes the construction of its factory in Pernambuco, whose operations must happen in 2015.
In total, the auto industry investments planned until 2017 outweigh R $ 75 billion, according to a survey of Anfavea, the entity representing the automakers installed in Brazil.
These figures show that the country is clearly at the center of the expansion strategies of the major automobile groups in the world, but also bring concerns about the potential for the market to absorb all this ability which will come into operation in the next few years.
In the calculations of Anfavea, the industry's production capacity will rise, after those investments, from 4.5 million to 5.8 million vehicles until 2017, about 1 million more units than the projected consumption. Fill this capacity will require automakers to double exports, what many, however, believe is unlikely. Ford's accounts, the industry will have an overcapacity next to 40% within four years.