Brazilian auto parts makers are eyeing boosting exports again after focusing on strong domestic demand.
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First quarter sales to Argentina, the main destination for the Brazilian components, fell 42% year on year to US$340m. Exports to the US were down 52% and German exports off 46%.
But the domestic market – both automakers and aftermarket – has now fallen and partsmakers have axed 28,000 workers since the final quarter of 2008.
To avoid more job cuts, some companies are now planning to boost export sales. BorgWarner plans to increase shipments from 8% to 15% of production while glassmaker Saint-Gobain Sekurit said it was negotiating contracts out to 2010 and 2011. Its 2008 domestic sales were so strong it was working three shifts and forced to cut back on exports. One of the new export customers is Belron International, owner of Belgium aftermarket giant Carglass.
Fras-Le, the Brazilian multinational maker of brake pads and linings with plants in the US and, soon, in China, expects to benefit in two ways. Firstly it plans to compete more strongly in the foreign aftermarket and, secondly, take advantage of some competitors’ financial difficulties by replacing them as a more dependable assembly line supplier.
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By GlobalDataBrazilian partsmakers down time averaged 25% last month, a slight improvement from 30% earlier in the quarter. During the 2008 auto sales peak, idle time was barely 5%, barely leaving room for preventive maintenance of production equipment.
Fernando Calmon
