Iveco has started heavy truck assembly in Brazil. The vehicles are now in production in the Iveco/Fiat Sete Lagoas plant, in Minas Gerais state.

The first Brazilian-made truck line is called Eurotech, offering models with gross combination weights between 41 and 74 tons. The vehicles are built with about 78% locally made components.

Iveco invested $US25 million to build the truck assembly line at Sete Lagoas. Construction of the light commercial vehicle factory started in 2000 and nowadays the plant produces the Iveco Daily, Fiat Ducato, Peugeot Boxer and Citroën Jumper vans. Production of the PSA models (which were all developed by and are also built in the same joint venture 'home' facilities in Europe) started in 2002.

Beginning production of trucks in Brazil shows that, after some years of uncertanty, Iveco has decided on its strategy for the Latin America market.

In October 2001, due to the huge economic crisis in Argentina, the company decided to transfer its heavy truck assembly line from the Córdoba plant to the Brazilian Sete Lagoas plant. But Iveco postponed the transfer after the Argentinean market improved in April 2002.

Last year, after a reversal in June, the company decided to divide production between the two countries and re-started work to build the truck assembly line in Brazil.

"The Córdoba plant will supply the new export markets we plant to open up in Africa and Near Orient, while the Sete Lagoas plant will supply Brazil and export trucks to Chile, Colombia and Caribbean countries", Flavio Ferraris, president of Iveco Latin America, told just-auto.

Local production will also make Iveco more competitive in the Brazilian truck segment. The company will have the right to sell trucks using the Finame scheme introduced by the government to offer low credit rates (compared with normal bank rates) for the purchase of trucks and commercial vehicles with at least 70% local componentry.

The company will also have the right to participate in the Brazil government's Modercarga programme, a truck finance scheme that will start this year with the aim of modernising the local truck fleet.

According to Iveco, the Sete Lagoas plant can produce 2,000 trucks a year with one shift, but output can be easily increased with an additional shift.

The company has more plans yet for its Brazilian factory.

In October Iveco will enlarge the locally-made truck range with the Eurocargo mid-size models and, next year, will start building a bus chassis with front-mounted engine and room for a 50-passenger body.

Rogerio Louro