After eight months on the job, the president of Volkswagen do Brasil, German Hans-Christian Maergner, has said that the automaker will post a small operating profit in 2004.
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The result of a complex company restructuring which sharply reduced fixed costs, the profit will be the first after six years of losses, according to reports.
Last Friday Maergner presented to management the PR53 medium range business plan, entitled Planing Round 53 (the title refers to the number of years the automaker has been in Brazil), which outlines company investments and actions for the next five years.
The plan is based on self-financing of the operation in Brazil. “It is a conservative plan, which puts the company on a solid base. It is very robust and more resistant to volatility. We ran aground because of our optimism in Brazil in the past decade. The sector foresaw a domestic market that is double the current reality,” said Maergner.
He said it was necessary to better balance trade between Brazil and Argentina. “The Fox station wagon – which will be produced from next year in Argentina – will help to balance Volkswagen’s trade between the two countries.”
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By GlobalDataVW Brazil will ship 65% of the vehicles’ components to Argentina in CKD kits. The assembly plant there will build them up and ship completed cars back to Brazil. “From here will go the stamped parts, motor, transmission and platform parts. It is an intelligent form of production. All parties gain,” Maergner said.
Employee performance will also be improved. “The Brazilian is motivated. We need to take advantage of this to achieve more company loyalty,” Maergner added.
