BRAZIL REPORT
In line with ANFAVEA forecast of 20% reduction in production for 2023, Scania and Mercedes announced the reduction of one shift of production in MHV production lines. Scania reallocated 200 employees at the remaining shift and laid off part of its temporary workers in the workforce. Scania does not have a forecast to reopen the second shift.
At the same time, Mercedes announced three months forecast to reopen the shift. While Scania only mentioned market demand as a reason for its reduction, Mercedes mention Market, lack of components and the country’s interest rates.
Source: Valor Econômico Read The Article
PSR Analysis: With pre-production of Euro V versions at the end of 2022 and low demand for more expensive Euro VI versions, it is natural to reduce production by OEMs and to manage people and shifts to adjust costs.
The forecast of Mercedes for second shift return seems right, since inventory of trucks produced in 2022 should not last longer than May, with the sales numbers seen in Q1 2023. However, there is much expectation on new government movements in Brazil, with less positive scenarios than negative ones. PSR
Fabio Ferraresi is Director, Business Development South America, for Power Systems Research
