Within two to three months, Anfavea, Brazil’s national automakers association, expects to ready a detailed report to help the government improve local auto supply chain productivity.
This study started last year but evolved at a slow pace, as it tried to meet the needs of all 25 members, agricultural machinery producers included.
Anfavea was founded on 15 May, 1956, some months before the first automobile was produced in Brazil under increasing nationalisation rules.
By the end of 2010, PricewaterhouseCoopers had been hired to coordinate the study and to propose ideas. However, there is no deadline for the final conclusion and approval before proposals head for the nation’s capital, Brasilia.
One key issue is the price of raw materials. Despite Brazil being the world’s biggest iron ore producer, steel here costs 40% more than abroad, as recent Anfavea presidents repeatedly emphasised.
High capital costs also cause worry because base interest rates are too high. This policy affects investments, specially by Tier 2 and Tier 3 suppliers, who are hit harder because guarantees required for official loans are strict.
“The problem is not increasing imports but difficulties exporting. The country needs to be freed of protection measures, yet it needs to find new means to compete, here and in export markets, even with the overvalued currency”, Anfavea president Cledorvino Belini told just-auto.