Navistar yesterday (October 31) announced the end of its International Caminhões do Brasil brand in the Brazilian truck market, writes Rogério Louro.
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The decision is part of a Navistar’s worldwide reorganisation to reduce costs and increase sales but also results from poor sales in Brazil.
The locally-built International trucks contained a high proportion of imported parts (between 30 and 40%) and the company said that the 200% devaluation of the Brazilian Real since 1998 made had made its local operations unsustainable.
The high number of imported parts increased production costs and the retail prices of International trucks marketed in Brazil and sales fell as a result.
Between January and September 2002 International Brazil sold 353 trucks, down 33.1% on the 528 units shifted in the same period of 2001.
Production and sales of International’s trucks for the Brazil market stopped yesterday though assembly of the 9800 heavy truck model for export only will continue for six months at the plant in Caxias do Sul city, Rio Grande do Sul state.
International Caminhões do Brasil has a contract to export 1,000 9800 truck model units in CKD form to South Africa and has so far shipped only about 450.
The factory will continue production until the 1,000 kits ordered have been built.
The company expects finally to end Brazilian production and close the plant next May.
Navistar invested $US100 million to produce International trucks in Brazil from 1998 and built three models: the medium 4200, the semi-heavy 4900 and the heavy 9800.
The 15 dealers handling the brand will either close once final stock is sold or sign up with another truck maker.
Pulling International out of Brazil will cost Navistar about $US70 million in costs including taxes and indemnity.
International is the second truck brand to exit Brazil this year. In January, General Motors also stopped production and sales of Isuzu-designed GMC-badged trucks, again due to falling sales and the high number of imported components.
However, though Navistar is closing down International Caminhões do Brasil, it will continue to invest in its Brazilian engine company International Engines South America – the biggest diesel engine maker in Latin America.
