From 2007 to 2013, automotive sales in Brazil grew by more than 50 percent, making the South American country the fourth largest vehicle seller and eighth largest vehicle producer in the world in 2014. Today, its current economic status has stalled as sales tumble and automakers seek survival strategies in the market.
The Brazilian auto industry depends heavily on the overall economy, consumer confidence and access of the burgeoning middle class for financing, which have all been on the decline the last two years.
There is light at the end of the tunnel however. A revolution in vehicle technology is on the horizon in Brazil as automakers vie to regain their competitive footing. Manufacturers are being encouraged to invest in lightweight and highly efficient vehicles through government. And as such, there are three key trends emerging for Brazil’s automotive market:
- Low cost vehicles – in the midst of an economic decline, there will continue to be a higher demand for low cost vehicles. Plastic usage is becoming increasingly more prevalent.
- Lightweight structures – automakers continue lightweighting vehicles and increasing the overall fuel efficiency with higher potential for fuel reduction through engine downsizing and lean burn technologies.
- Production process improvements – modular product structures, small and more agile production cells and assembly line improvements will play a key role as they allow for rapid changeovers and customization.
Yes, these trends align with the automotive industry at large. But in Brazil, it’s about survival so quick and nimble innovation and adaptation, in an effort to stay ahead of these trends, will be the key to success. It’s time to sink or swim.
With OEMs facing additional pressures, the automotive suppliers are tasked with operational excellence, contributing to efficiency wins, managing logistical costs and ultimately leveraging their potential to influence the solutions in the industry.
“Despite the challenging environment, there are indicators that the automotive market will rebound and Brazil will remain a key player,” said Gisele Santos, Industry Team Automotive manager for BASF in South America. “This is an opportunity for Brazil to reinvent itself and BASF is going to play a role, offering solutions to meet the current and future needs of our customers.”
BASF is well prepared for the challenge. With a strong concentration on future industry trends, BASF offers a broad product portfolio with diverse applications and global research and development at its fingertips. This is coupled with BASF’s expertise, deep understanding of the market and close partnerships with local OEMs.
“The downturn has allowed BASF to think more holistically about what else could be offered in an effort to help our customers and more effectively meet targets,” said Santos.
