Sale of Cummins falls 16% in South America

The diesel engine manufacturer Cummins closed 2012 with fall of almost 16% in its sales in South America, where 56% of sales concentrated in Brazil. Last year, the company sold $ 1.6 billion in the region, or 9.2% of total Group sales of $ 17.3 billion.
In 2011, the year of record for the company in both sales and production, the turnover of Cummins was $ 1.9 billion. Weighed in last year's performance the collapse of heavy vehicle industry, responsible for two-thirds of sales of Cummins engines. With the transition in engine technology, the trucks were less polluting, but up to 15% more expensive, leading to a 40% drop in the production of these vehicles throughout 2012.
With this, the production of Cummins engines – also used in industrial and agricultural machinery-equipment fell abruptly, totaling 59 thousand units in 2012, 47% below the volume of 2011, the best year in history in sales of trucks.
The company's financial result was not worse only because the poor performance of the engines-the main business-was minimized by positive numbers of emissions control systems and aftermarket automotive filters and fluids.
The direction of the company, however, provides better results for this year, given the resumption of heavy vehicles market. The expectation is for an increase of 20% to more than 70 thousand units, in the production of the engine plant in Guarulhos, in Sao Paulo.
For Luis Alfonso Pasquotto, President of the company in South America, the industry has managed to overcome the most critical phase of technological transition of engines and only depends on the heating of the economy now to re-grow. "It's a year of caution, but we are optimistic," said the Executive at the presentation of the results to the press.
He stated that, after cutting 150 employees at the end of last year, the company is already with his staff adjusted to business perspective for this year. Pasquotto also reported that the company did not change its investment program for the period from 2011 to 2016, which provides $ 50 million in modernization of engine plant and another $ 90 million in a new factory of generators-another division of the group-in Itatiba (Brazil).