The Brazilian component sector has to face up to competition from lower cost countries such as China and India, according to a panel at AutoData’s Seminar Automotive Purchases – Time for Growth.

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According to a report in AutoData’s newsletter, Brazil must raise quality to assure future competitiveness, although local purchasing executives are committed to sourcing locally as much as possible.


Fiat’s purchasing director, Vilmar Fistarol. warned that PPM rates are too high. “Companies need to do their homework with more precision. We can’t talk about competitiveness if, every time we return from collective vacation leave, the quality index drops significantly”.


On the other hand, PSA’s local purchasing director, Maurício Martins, said that his company has made huge efforts to increase local content to offset any fluctuations in the real, and it will not abandon this plan.


Renault is adopting a similar strategy with the new Logan, which goes into production next year with a targeted local content rate of 86% at launch, and 96% beyond that. “We chose to produce the parts locally, and we are going to maintain our position,” said Renault’s purchasing director Emmanuel Gavache, according to AutoData.

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The only panel member to confirm imports from China was Karen Leggio, vice president, purchasing, at General Motors LAAM, the company’s Latin America, Africa, and Middle East division. GM currently purchases tyres for the Celta from China, however she is quoted as saying that this is not a long-term policy and that using local suppliers is critical to GM’s profitability in the region.