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-- 28 november 2018 são paulo #alsa17 home report 2017 registration location 2017 sponsors 2017 programme 2017 speakers 2017 attendees 2017 photos 2017 archive toggle navigation toggle search search for... search search event... search read this in holding on to the hard-won gains in brazil oems, tier suppliers and logistics service providers at this year’s automotive logistics south america summit suggested that they will all need to work more effectively – both individually and with each other – if they are to build on the gains forced on them by the recent economic downturn. gareth tredway and christopher ludwig report from são paulo the brazilian economy has had it rough over the past few years, experiencing its deepest recession since the 1930s, with gdp growth shrinking for eight consecutive quarters. that contributed to a drought in new vehicle sales from 2013 through to 2016. this long crisis laid waste to many parts of the brazilian and wider south american automotive sector and its supply chain. suppliers went bust or closed factories; several carmakers, including china’s chery, mothballed or sold production sites; other manufacturers cut back investments and scaled back former plans; and logistics firms went out of business, sold off assets or consolidated to survive a decline in rates and business volume. but there were some positive developments as well. the government, though in significant turmoil, has made moves to improve some business processes, such as customs clearance, while lowering taxes in certain areas ; efforts have been made, in particular, to support exports, including fast clearance lanes at ports. and despite brazil’s historically protectionist tendencies, there have also been moves to improve trade relations, especially with the mercosur trade bloc which includes brazil, argentina, paraguay and uruguay (venezuela is currently suspended). companies have made many adjustments to survive, including cutting costs and striving to become more competitive for an eventual return to growth. and finally, light is appearing. growth in gdp returned in brazil earlier this year and while initially driven by agriculture, the recovery now appears increasingly broad-based, from consumer products to vehicles. economic indicators are positive and mostly conducive to growth; inflation has fallen to its lowest level in brazil since the turn of the 21 st century, raising real incomes and allowing for lower central bank interest rates. the brazilian real is also at a competitive level to the us dollar and other foreign currencies, further supporting exports. trade has also been helped by economic reforms and recovery in brazil’s most important destination market and neighbour, argentina. these developments have brought some relief to the car market and hope for the future of the south american automotive supply chain. forecasts are now for new light vehicle production to finish almost 25% higher this year, at 2.6m units, according to helton arsenio, senior marketing analyst at pwc autofacts in brazil. the assembly growth has been driven by double-digit gains in domestic sales and a surge in vehicle exports. only the strong survive speakers at this year’s automotive logistics south america summit in são paulo expressed clear relief at the official end of the recession. luis santamaria, vice-president of supply chain for latin america at fiat chrysler, the largest carmaker in brazil, said companies that had survived the past few years would probably have come out stronger. “just being here after this turbulent year is already a victory,” santamaria told delegates. but executives also warned that gains made and lessons learned during the crisis should not be lost, now that growth had finally resumed. while santamaria was optimistic about the future, he stressed the importance of maintaining recent supply chain improvements. efficiency in internal processes is often still brazilian carmakers’ best hope in overcoming the country’s chronic infrastructure shortages, inefficient customs and thick bureaucracy. “not losing what we have gained in terms of costs will be a great challenge, not only for our internal processes but also in terms of the lack of investment over the past decade in ports, airports and bureaucracy and customs,” he said. “we will have to be very close to these things and interact with them.” continental’s macio machado said the crisis had led the tier one to re-evaluate its logistics network and processes in brazil marcio machado, head of supply chain management for the central electronics plant in brazil at tier supplier continental, said challenges in the downturn included the obvious drop in volumes that came for most manufacturers, as well as excess capacity and large inventories. machado said that, during the downturn, continental had analysed its supply chain in brazil, which includes 11 plants, to identify opportunities to consolidate logistics flows across the network. the focus was not only on getting better prices from providers, but to improve load factors, labour productivity, packaging and logistics engineering. “only looking at costs is not enough, so you must look at how to reduce costs and add value for the customer,” said machado. along with maintaining cost-efficiencies, executives also stressed the importance of manufacturers and suppliers partnering together to avoid waste. “over the last year, we have talked about what we could do to overcome this period of crisis in terms of relationships with our customers, not only logistics operators, but also oem companies and all of the suppliers in the chain,” said paulo sarti , managing director for south america at penske logistics. “the crisis forced companies to innovate and do things differently and we must not lose sight of this, because we tend to forget these things; when volumes start going up again, we tend to go back to the old ways of working,” he added. sarti highlighted collaborative logistics in terms of fleet and warehouse sharing, as well as other resources, as areas where the country had started to make progress and could go a lot further. “even in production, companies started sharing areas that were not [formerly] productive. this was not common for the automotive industry, but in the last few years this started happening strongly,” said sarti. “it is important to not end this process of collaborative logistics once the economy goes back up.” alex feijolo, director of sales and marketing at gefco brazil, also stressed that the automotive logistics sector in brazil needed to improve collaboration, as most relationships between manufacturers, suppliers and logistics providers were extremely transactional, based on short-term contracts and annual bids. he called for more efforts to work together beyond the cheapest bid each year, pointing, among other things, to the high implementation costs and risks to supply chain operations that came with frequently changing logistics providers. “we should look to implement a real partnership model that involves manufacturers and service providers,” he said. trying to recover a lost decade such cautious approaches to this year’s growth may be wise for several reasons. for one, brazil is not quite out of the woods yet. the past two years in brazil have seen one president impeached, one previous president charged with corruption and the current one deeply unpopular following bribery allegations. further political instability could have a dramatic impact on economic confidence – especially in the face of a difficult presidential election in 2018. secondly, despite the growth, brazilian light vehicle sales have only recovered in comparison to the annus horribilis that was 2016, when sales slipped below 2m. even 10% growth this year would only leave sales back at around 2007 levels; paulo sarti said brazil had essentially experienced “a lost decade”. paulo sarti said that penske had continued to invest in new technolog

URL analysis for automotivelogisticssouthamerica.com

https://automotivelogistics.media/events/south-america/2017-2/report-2017/#modalforgotpassword
https://automotivelogistics.media/news/regulatory-change-brazil-boosts-exports-production
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https://automotivelogistics.media/news/russias-car-exports-fail-to-meet-forecasts
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https://automotivelogistics.media/news/gm-supplier-network-invest-500m-argentina-site
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Domain Name: AUTOMOTIVELOGISTICSSOUTHAMERICA.COM
Registry Domain ID: 1409590062_DOMAIN_COM-VRSN
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Registrar URL: http://www.godaddy.com
Updated Date: 2015-11-02T10:06:54Z
Creation Date: 2008-02-25T12:27:53Z
Registry Expiry Date: 2020-02-25T12:27:53Z
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