Brazilian Law for AG Tractor Cabins Changes

News: Central/South America

2023-02-20

Brazilian Law for AG Tractor Cabins Changes

The law requiring the use of cabin tractors for spraying includes changes in applications and timing. Under the new wording, cultivation methods in which the use of the original or adapted closed cabin is unfeasible depending on the spacing between lines, a sprayer trailer pulled in a machine without closed cabin may be used, provided that it meets certain conditions.

New deadlines vary from 120 months for small properties and 60 months for large properties.

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PSR Analysis: Given the long deadlines, the market total volumes should not be impacted, but product lines should have volume changes within the application the product and model level. These should be reflected in next publish of PSR’s OE Link™ Forecast.    PSR

Fabio Ferraresi is Director, Business Development-South America, for Power Systems Research

January Brazil Truck Production Drops 72%

Fabio Ferraresi
Fabio Ferraresi

Truck production in Brazil in January was 4,049 units vs. 14,614 units in December per  Anfavea (the association that represents the automakers installed in the Brazil) monthly

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PSR Analysis: This decline was expected due to the introduction of PROCONVE P8, the regulation in line with Euro VI, that reduces the toxic gas emission limits and therefore increases the complexity and the price of new trucks.

Under that regulation, OEMs have the right to sell Trucks at PROCONVE P7 (Euro V) produced in 2022 until March 31, 2023. This caused a pre-production and inventory increase to sell trucks with lower price at the beginning of 2023.

The Anfavea forecast points to a reduction in MHV production from 192,000 to 154,000, but their calculation on Sales, Exports and Stock does not match. Subscribers of Power Systems Research data and intelligence can see a well-balanced forecast, considering different stock level by subsegment of GVW.    PSR

Fabio Ferraresi is Director, Business Development-South America, for Power Systems Research

2023-01-22

FPT Developing Ethanol or Biomethane Engine in Brazil

FPT, Mahle and Brazilian universities are working to develop an FPT F1C Bi-Fuel engine to meet Brazilian transportation needs using Ethanol, or Biomethane and Hydrogen for use in hybrid vehicle applications.

The project involves the creation of mathematical models, which will be used to characterize and predict the behavior of the engine operating with ethanol and biomethane, assisting in the development of components and hardware, and testing the equipment at Mahle’s technology center in Jundiaí (SP).

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PSR Analysis. Brazil and much of South America have extensive renewable sources  for fuel. FPT and Mahle are betting on alternatives that cost effectively meet the decarbonization needs consistent with infrastructure restrictions.   PSR

Fabio Ferraresi is Director Business Development-South America for Power Systems Research

First Synthetic Fuel Neutral CO2 Starts in Chile

Fabio Ferraresi
Fabio Ferraresi

Construction of the first world carbon-neutral synthetic fuel plant was started in Chile, in December 2022. With a US$55 million investment in the project, Siemens Energy, HIF Global and Porsche will produce Methanol and Gasoline using water, wind and CO2. The plant has a planned capacity of 550 million liters in 2027.

The Haru Oni plant is Installed in the Magallanes, Chilean Patagonia region. It is known for the vast potential for its hydrogen market, with winds of more than 6,000 hours of charge to generate green electricity, three times more than in Europe.

Source: Automotive Business     Read The Article

PSR Analysis. Cost competitiveness is the major factor in the success of this project. E-fuels are an interesting alternative to accelerate the decarbonization of the transportation industry, especially in vehicles with complex electrification, such as ocean-going vessels and airplanes where the energy density and battery weight becomes a difficult factor. PSR

Fabio Ferraresi is Director Business Development-South America for Power Systems Research

Brazil Moves Forward on Truck Fleet Renewal Program

BRAZIL/SOUTH AMERICA REPORT  

In December 2022, the Brazilian Government published regulations for the Fleet Renewal Program authorized by the law that was published in H1 2022. Under this regulation, truck owners may receive the old truck market value from companies in the Oil and Gas exploration chain, provided that they prove the truck was taken out of circulation, disassembly and recycled. The program is voluntary, both for owners selling the old truck and for O&G companies designating resources for the program in exchange for a reduction of duties on O&G exploration contracts.

Source: M&T     Read The Article

PSR Analysis. Preliminary analysis suggests the program won’t be very effective, since significant recycling and paperwork efforts are required to sell the old truck at market prices. It seems this is a regulation published to show environmental efforts, but one that will have limited effectiveness. No impact is seen in the Truck Market now unless market conditions change drastically. PSR

Fabio Ferraresi is Director Business Development-South America for Power Systems Research

2022-12-14

John Deere Plans Construction Equipment Plant

Fabio Ferraresi
Fabio Ferraresi

John Deere has just announced an investment of US$ 35 million (R$ 190 million) in the production facilities for its Construction Division, two manufacturing units located in Indaiatuba, in the interior of São Paulo. The goal is to expand capacity to meet the growing demand for machines and to implement its Smart Connected Factory program, or Industry 4.0, which encompasses technologies to increase efficiency, quality in processes and reduce operating costs.

Source: Investe São Paulo  Read The Article

PSR Analysis: John Deere is reaching production capacity with the huge growth of demand for Construction Equipment in Brazil in recent years. This demand should continue and should keep increasing with the planned Infrastructure Investments and the continued expansion of the Mining business. Moreover, the strategy of localization, making products in Brazil rather than importing, making Brazilian plants a hub for exports, needs continued investment.   PSR

Fabio Ferraresi is Director Business, Development South America, for Power Systems Research

BorgWarner To Produce Vehicle Batteries in Brazil

BorgWarner said it will start producing battery systems for electric vehicles in Piracicaba-SP, Brazil, by Q1 2023 with declared annual capacity of 1,000 electric units.

The plant in Piracicaba formerly belonged to Delphi and was acquired by BorgWarner in 2020. The plant will receive a production line from Akasol, another company acquired by BorgWarner.

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2022-11-17

Randon Acquires US Trailer Maker Hercules

Randon, an Brazil-based OEM, has agreed to invest $40 million to acquire the US-based trailer manufacturer Hercules. Randon’s purchase agreement for Hercules is expected to be finalized within 120 days. Randon Implementos is the largest semi-trailer manufacturer in Latin America. The company maintains a manufacturing park in Argentina and works with partners to assemble semi-trailers at several points in Central America and Africa. It is the main Brazilian exporter in the segment, with a historical market share of 60% in exports.

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São Paulo Partners with ENEL To Replace Diesel Buses

Fabio Ferraresi
Fabio Ferraresi

The City of São Paulo has announced a partnership with Enel, an energy supplier, for its bus fleet electrification project to be completed by 2024. Under the agreement, the city will get funding for the project of R $ 8 billion. The plan calls for the replacement of the fleet of combustion buses with non-polluting models.

According to the city, Enel is one of the main stakeholders in the project and should assist companies in logistics, infrastructure and the feasibility of electric vehicles based on their experience in Latin America.

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