Automakers will defend supply chain in Brazil, says Anfavea

The Brazilian automotive industry will promote in the coming years an agenda to defend its supply chain at a time when the country’s internal problems, exacerbated by the pandemic and the war in Ukraine, affect the sector’s ability to deliver products and its competitive ability to exports.

The entity that represents the sector took office this Monday (2) to a new board for the triennium until 2025, defending the industrial sector, but without giving details about the proposals.

The sector has the capacity to produce 4.5 million vehicles a year, but more than 50% of this volume has been idle since 2020. The industry has suffered a crisis in the supply of automotive components as technologies such as electrification, autonomous driving and new forms of vehicle consumption have changed the global investment landscape.

“New technological routes and decarbonization have created a great challenge. Brazil has state-of-the-art technology, but will we continue to have it in two years?”, said the new president of Anfavea, Márcio de Lima Leite, in a presentation to journalists.

Leite, also vice president of institutional relations for the Stellantis group in Latin America, replaced Luiz Carlos de Moraes, from Mercedes-Benz, stated that the challenge for the sector “is to make the supply chain follow the new technological routes”.

The executive will take on a broad sector agenda with the federal government, which in April launched a truck fleet renewal program, in addition to fiscal discussions that include a reduction in the Tax on Industrialized Products (IPI). This industry earns BRL 330 billion, employs 1.2 million people and is responsible for 20% of the country’s industrial GDP.

According to him, a delegation formed by the new board of Anfavea and presidents of the automakers will have a meeting with the Minister of Economy, Paulo Guedes, on Tuesday (3) to discuss “suggestions for the resumption of industrialization” in Brazil.

“We need to accelerate tax reform. Brazil has managed to make interesting reforms in recent years and we need the first step of tax reform so that the country can be competitive”, said the new president of Anfavea, defending a “sense of urgency” in the matter.

Leite stated that last year the sector stopped producing around 350,000 vehicles due to lack of parts and, this year, the sum so far has reached more than 100,000 units.

Asked about the expansion in sales of electric cars in developed markets, Leite said that electrification is still an “expensive technology for massification in the country”.

“One cannot just look for the electrification solution (for the reduction of carbon emissions). The Brazilian ethanol solution has to be worked out with a careful eye because it is very interesting. We have a lot to improve on ethanol”, said the new president of Anfavea.

There are solutions from the national industry for hybrid vehicles, which have electric and combustion engines that use ethanol. The industry has also discussed the possible use of ethanol in fuel cells in fully electric vehicles.

Leite stated that, in addition to defending ethanol technology and measures that allow the 98,000 automakers’ suppliers to adapt to the times of electrification, Anfavea will defend vehicle inspection in Brazil to take older vehicles off the streets and encourage sales. of new models.

“Brazil has a long supply chain and we have to work for it. This has to be the number one agenda in all our meetings, said the executive.