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Selic Interest Rate Cut Has Limited Impact
The initial reduction in Brazil’s benchmark interest rate (Selic) is expected to have limited short-term impact on the automotive sector, according to industry assessments. Despite the start of a monetary easing cycle, financing conditions remain restrictive, with credit costs still elevated compared to historical averages.
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VWCO Tests B100 Soybean Biodiesel
Volkswagen Caminhões e Ônibus (VWCO) is conducting tests using B100 soybean-based biodiesel in heavy-duty diesel engines as part of its efforts to evaluate lower-carbon fuel alternatives compatible with existing internal combustion engine (ICE) platforms. The tests aim to assess engine performance, durability and emissions behavior using 100% biodiesel without fossil diesel blending.
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GAC Plans Vehicle Production in Brazil
Chinese automaker GAC has announced plans to establish vehicle production in Brazil as part of its strategy to expand its presence in Latin America. The initiative involves local manufacturing operations aimed at improving cost competitiveness, mitigating import tariffs and enabling greater alignment with local regulatory and market requirements. The company has been advancing its global expansion strategy with a portfolio that includes internal combustion engine (ICE), hybrid and battery electric vehicle (BEV) powertrains. Local production is expected to support supply chain development and improve access to financing mechanisms tied to domestic manufacturing, while strengthening the brand’s positioning in one of the region’s largest automotive markets.
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Brazil Vehicle Exports Rise To Mexico, Fall To Argentina

Fabio Ferraresi Brazilian vehicle exports showed mixed performance in early 2026, increasing significantly to Mexico while declining sharply to Argentina. Growth in shipments to Mexico reflects stronger demand conditions and efforts by Brazilian OEMs to diversify export destinations, while the drop in Argentina is linked to weaker domestic demand, tighter import controls and foreign exchange constraints.
Overall exports remained supported by regional demand adjustments and production planning by automakers,…
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Brazil Truck Production Drops in 2026 First Two months
Brazilian truck production fell 27% in the first two months of 2026 compared with the same period of 2025, despite expectations linked to the Mover Brazil program. The decline reflects weaker domestic demand, cautious fleet renewal decisions and slower freight activity at the start of the year.
OEMs adjusted output in response to lower order intake, particularly in the heavy duty segment. The result highlights ongoing volatility in Brazil’s commercial vehicle cycle and limited short term impact of policy support measures on production levels.
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VW Tukan Is Brand’s First Flex Hybrid Vehicle
Volkswagen confirmed that the upcoming Tukan compact SUV will be its first flex fuel hybrid vehicle developed for Brazil. The model will combine a hybrid powertrain with a flex fuel ICE capable of running on gasoline and ethanol, aligned with local decarbonization strategies and Brazil’s biofuel infrastructure.
The vehicle is expected to be produced locally and positioned in the compact SUV segment, supporting Volkswagen’s regional electrification roadmap. The launch reinforces the company’s focus on hybridization technologies adapted to Brazilian market conditions and regulatory trends.
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Schwing Stetter Starts Production of Concrete Mixers
Schwing Stetter has started automated production of concrete mixer trucks in Brazil, implementing new manufacturing technologies to increase productivity, quality consistency and operational efficiency.
The initiative includes automation systems across assembly processes and aims to strengthen the company’s local manufacturing footprint in response to demand in the construction sector. The move supports domestic supply capability and aligns with broader industry trends toward digitalization and advanced…
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Toyota Engine Plant To Resume Production in 2028

Fabio Ferraresi Toyota’s engine manufacturing plant in Porto Feliz (SP), Brazil, will not resume full production until 2028 after suffering severe structural damage caused by a storm in September 2025. The facility, responsible for producing flex-fuel ICE engines for models such as Corolla, Corolla Cross and Yaris, was heavily damaged, requiring complete reconstruction. Only the original foundation slab will be reused, with a new industrial building designed to incorporate higher levels of automation and a more compact manufacturing layout.
During the reconstruction period, Toyota implemented contingency measures, including the installation of a temporary structure in Porto Feliz to maintain partial engine production. Part of the workforce was reassigned to the Sorocaba plant, while other employees entered temporary layoff programs. The company plans to test a new productivity and manufacturing concept by the end of 2027, with full operational normalization scheduled for 2028.
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Brazil Suspends 2026 School Bus Procurement
The Federal National Education Development Fund (FNDE), part of Brazil’s Ministry of Education, has revoked the public tender for the purchase of approximately 7,500 school buses under the Programa Caminho da Escola scheduled for 2026. The cancellation was formally published in early February 2026 to align the procurement with a new law on tax exemptions, which altered fiscal conditions for vehicles eligible in the program.
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Brazil 2026 Truck Sales Drop Sharply in January
Brazil’s truck market started 2026 in significant decline. A total of 6,379 units were registered in January, representing a drop of approximately 30% compared to January 2025 (9,131 units) and a 34% decrease versus December 2025 (9,765 units), according to data from Fenabrave (National Federation of Motor Vehicle Distribution).
Market leadership in the month was shared by Volkswagen Caminhões e Ônibus and Mercedes-Benz, each holding around 27% market share. They were followed by Volvo, Scania, Iveco, DAF and Foton.
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Fabio Ferraresi Managing Director, South America
Fabio Ferraresi is Managing Director, South America at Power Systems Research, where he leads regional market intelligence, consulting activities, and business development across multiple equipment segments. He holds a Bachelor’s degree in Mechanical Engineering from the University of São Paulo (USP) and an MBA in Business Management from FGV and Ohio University. Fabio also holds Six Sigma Black Belt, CMQ-OE and CQE certifications from the American Society for Quality.
Prior to joining PSR in 2014, Fabio spent 13 years at Eaton Corporation in Brazil and China, where he held leadership roles including supplier development manager, supply chain manager, factory manager, and quality manager. His experience spans the automotive and industrial sectors across South America and Asia. He also serves as director at Grupo Engenho, a consulting firm focused on operational excellence and business transformation and volunteers on key committees of SAE Brazil and AEA, nonprofit organizations that support the development of policies related to the products PSR covers.
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