Fabio Ferraresi contributed to this report

 

Agrishow Registers Sales Increase of 13%

The biggest agricultural fair of Brazil posted sales of 2.2 billion BRL, up13% compared to last year's show. The volume might be even higher when adding business done by banks and transactions started at the fair. Total results are expected in the next weeks.

Source: Automotive Business

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PSR Analysis: The fair is an important barometer for the agricultural segment in Brazil. Usually, the sales at the fair set a trend for the agricultural machine segment. We were expecting activities at least 10% higher this year, based on the expected record crop levels this year.

 

Road Buses Sales Will Grow in 2017

With the changes in intercity transport legislation and the possibility of economic stability, companies might invest in fleet renewal this year. If the expectation materializes, sales of road buses could grow more than 50%, reaching 14,000 units this year.

Source: Automotive Business

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PSR Analysis: Changes in legislation is one of the main demand drivers in the Brazilian bus market. New regulations might force a positive scenario for bus manufacturers. However, more credit and increased economic stability is necessary before entrepreneurs will invest their money in renewing their fleet.

 

Marcopolo Confirms Planalto Bus Plant Deactivation

After joining forces with Neobus, Marcopolo has decided to deactivate its Planalto plant. Following the joint venture with Neobus, Marcopolo ended up with three plants, but plans to concentrate activities in only two. The initial goal is to switch the production of the Planalto unit to the Neobus production site.

Source: Autodata Magazine – ed. 4060

PSR Analysis: Marcopolo is moving to strengthen its position in the bus market by reducing costs and increasing synergies with the operations of Neobus. While Neobus probably will focus on the more affordable buses market, Marcopolo will go after the premium segment. Requests for new buses assures production for the next 90 days. The majority of requests are for intercity models to comply with the new legislation.

 

Kia Bongo 2018 made in Uruguay Arrives in Brazil

Production of the minitruck Kia Bongo was resumed in Uruguay this year and it is arriving at Brazilian dealers as a 2018 model. Equipped with 2.5 turbo diesel engine with 135 hp, the vehicle is categorized as a Light Commercial Vehicle.

Source: Automotive Business

PSR Analysis: The production of the Kia Bongo in Uruguay started in 2010, but due to the contraction of the Brazilian market, production was stopped for a year. Resumption of this production is a sign the market in Brazil is recovering.

 

Argentina Increases Car Imports from Brazil

Argentina is helping automotive production in Brazil by increasing imports from the country. Purchases from Brazil grew more than 50% in the first four months this year, compared to the same period of 2016, reaching 67% of the total exports of companies in Brazil. Other countries also increased their imports from Brazil. According to ANFAVEA, today, 1 of 3 cars produced in Brazil is exported.

Source: O Estado de São Paulo

PSR Analysis: While the exports to Peru and Colombia ar growing, Argentina is still the main market for Brazilian exports. The recent data brings hope for the Brazilian automotive segment, which has been battling weak sales.

 

Electrical Car Gets Advantage in New IPI Tax Calculation

The possibility of changing the way taxes on cars in Brazil are calculated could stimulate sales of electrical cars in the country. Today, electrical cars are charged higher taxes of IPI (taxes on industrialized products) because the aliquots are calculated on the cylinder capacity of the engine (combustion) of the car. Since electrical cars don't use combustion engines, they are charged with the highest taxes (25%) because they do not fit in any category identified in the legislation.

Source: Valor Econômico Newspaper April 18th.

PSR Analysis: If the new method of IPI calculation is accepted, it may open a new market for electrical car manufacturers in Brazil. The adoption of electrical cars depends on more than just cheap taxes, however, including such as items as the infrastructure for fueling the battery cells. However, if this occurs, it might stimulae investments and employment in Brazil. PSR