Brazil's booming new car market this year had prompted concerns the country's auto parts industry may be unable to match pace with the needs of the domestic automakers, many of whom also export substantial numbers of vehicles in both fully assembled and kit form.

However several recent announcements of major expansions or the building of new car parts factories have now begun to dispel such fears.

Delphi has just confirmed its 12th plant in Brazil, to be inaugurated by mid-2008.

Since 2003, when the US-based supplier nominated the South American region as a development centre, its employee count here has soared from 7,500 to 10,000. Brazil alone accounts for 85% of Delphi's revenue in the region and that is expected to pass $1bn this year.

Johnson Controls is enlarging its battery plant and that will be the largest of its type here. Meanwhile, Arvin Meritor plans to invest $20m in its wheel plant and technical centre over the next two years.

Turbocharger makers BorgWarner and Honeywell have each received the green light from headquarters to improve facilities and boost production.

German company TMD Friction is finalising arrangements initiated in 2004 to supply customers in both Brazil and abroad. And Eaton has announced it will concentrate production of gearboxes for light vehicles at a unique site. Production will be a record 600,000 units yearly with 150 more employees.

According to union group Sindipeças (encompassing 600 auto parts companies), parts makers will collectively invest $1.2bn over the next 15 months to meet projected demand. And Brazil's auto industry will build 2.85m units, CKD kit exports included, an all-time production record.

Fernando Calmon