INDUSTRIES
Fiat do Brasil races towards international market
Sílvio Ribas
The Italian group's Brazilian subsidiary takes the lead in domestic sales, gaining impetus to increase its exports by 100% next year
Shipment of Fiat vehicles: assuming the lead among international auto markers installed in Brazil. Some 25 years after setting up shop in the municipality of Betim, Minas Gerais state, Fiat SpA's Brazilian subsidiary has plenty of reasons to celebrate. First of all, the company has taken the lead in domestic sales of automobile and light commercial vehicles, ending the 41-year reign of its competitor Volkswagen. In 2001, Fiat Automóveis S.A. commercialized 415,654 units locally, guaranteeing the company a 28.1% market share, compared to the 27.2% reported by Volkswagen (403,604 units). From January to December, the total number of vehicles sold by all carmakers in Brazil amounted to 1,478,654 units.
Enthusiastic with this feat and under new command, the company is now preparing to increase its export drive, capitalizing on its own competitive advantages, as well as those provided by its operations on Brazilian soil. "We will double exports by 2003," boasted Gianni Coda, general director of one of Fiat SpA's four divisions in Turim, Italy and until early this year, former CEO of the Brazilian outfit, a position taken over by Alberto Ghiglieno, who in turn was the former purchasing director of the group in Europe. With the experience and success obtained in Brazil since his arrival in August 1999, Coda was promoted to the second position in the Italian group's hierarchy, assuming the most important division that unites Fiat's automobile business, Lancia and light commercial vehicles. The other three areas include Alfa Romeo, Development of International Business and the Services divisions.
The new head of Fiat's Brazilian operation does not only share the same objectives of his predecessor, but also forecasts a growth of between 3% and 5% in the domestic market. "Our market share should reach between 26% and 27%," estimates Ghiglieno. The biggest Fiat operation outside Italian soil, Brazil is recognized by the group's international area directors as the auto hub of global importance due to the size of its domestic market, the large supply of inputs at competitive prices and the advances in productivity. Last year, Fiat's Brazilian subsidiary exported 53,000 vehicles, the majority destined to the European market, representing US$ 500 million in revenue. Based on the group's forecasts, shipments should reach 100,000 units in 2003. For Latin America, the company intends to double sales from 25,000 to 50,000 units by 2003-a robust advance considering the 18,000 vehicles sold in 2000.
Under the group's new strategy, Latin America will be the priority export region for Fiat's Brazilian subsidiary, while Europe continues as an important market and is set to absorb 70% of shipments in 2003. The top seller is the Palio model, launched globally in Brazil in 1996 and which gained a new line in 2001. "Until 2003, however, exports will be divvied up equally between Europe and Latin America," explained Lélio Ramos, the company's commercial director. Expansion in the Latin American market will already begin in this half with shipments of the utility model Doblò, launched in Brazil this past October. Some R$ 280 million was invested in the model, which is slated for launch in 14 Latin American countries in regional presentations. "Our goal is to export 2,500 units of the new model to Latin America this year," affirmed Ramos.
AUTO SECTOR ACCELARATES EXPORTS
The National Automakers Association (Anfavea) hopes that its members' exports will grow some 10% this year, reaching a total US$ 4.5 billion in sales abroad, compared to US$ 4.1 billion in 2001. From 2000 until last year, the sector's total exports expanded 4.43%. With the 5% increase in total production (1.87 million units), the entity expects domestic vehicle sales to go up 3% to 1.64 million units. Besides Fiat and Volkswagen which, together, have shipped US$ 1.75 billion, the main carmakers that operate on the external market are precisely the largest players on the domestic front: General Motors (GM) and Ford.
GM do Brasil was ranked second in export volume, with sales abroad totaling US$ 705.4 million, compared to US$ 572.6 million in 2000. This year, the carmaker forecasts a 10% increase in export value. China, Mexico, Venezuela, Chile, Argentina, India and South Africa are the main buyers of Brazilian-assembled vehicles. The company also closed a contract with Egypt for US$ 200 million worth of exports. Ford, for its part, had projected exports of US$ 300 million last year, overshooting its target by 50%. The carmaker will slate for export between 10% and 15% of its output of the Amazon, the new global model to be produced this year in Camaçari, in Bahia state. Of the carmakers installed in the country, the most active in trade is Volkswagen, with US$ 1.271 billion in exports last year.
This value surpassed the company's US$ 1.2 billion export target and is equivalent to roughly 2.2% of Brazilian sales abroad, which totaled US$ 58.22 billion from January to December, according to official data. Herbert Demel, president of Volkswagen's Brazilian subsidiary, forecasts a 10% rise in exports this year, with an increase in orders mainly to Latin America. In addition to this market and North America, the carmaker is working to boost sales to Africa, Europe and the Middle East.
The Brazilian factory in Betim continues to be a fundamental hub for Fiat in Latin America, since the company decided to adjust production at the Córdoba factory in Argentina to the new market reality: local output, which hit 30,000 vehicles in 2001, should reach a maximum 12,000 units this year. With a 500,000-vehicle output per year, the Betim factory has already placed seven million vehicles on the streets, 2.4 million of which were shipped abroad. Fiat's Brazilian subsidiary is also highlighted for its engine production and exports. Roughly 430,000 engines of the Fire and Fiasa models are exported annually to Poland, Turkey and Italy.
Despite the announcement of a global restructuring plan by the group, the directors of the Brazilian subsidiary assure that the adjustments carried out in Betim over the last few years-cost reduction, outsourcing and the reorganization of its dealership network-, have been more than enough. Proof of this is the company's results: a R$ 228 million profit last year.
Fonte: Revista BrazilNow, 2002.
Fiat do Brasil races towards international market
Sílvio Ribas
The Italian group's Brazilian subsidiary takes the lead in domestic sales, gaining impetus to increase its exports by 100% next year
Shipment of Fiat vehicles: assuming the lead among international auto markers installed in Brazil. Some 25 years after setting up shop in the municipality of Betim, Minas Gerais state, Fiat SpA's Brazilian subsidiary has plenty of reasons to celebrate. First of all, the company has taken the lead in domestic sales of automobile and light commercial vehicles, ending the 41-year reign of its competitor Volkswagen. In 2001, Fiat Automóveis S.A. commercialized 415,654 units locally, guaranteeing the company a 28.1% market share, compared to the 27.2% reported by Volkswagen (403,604 units). From January to December, the total number of vehicles sold by all carmakers in Brazil amounted to 1,478,654 units.
Enthusiastic with this feat and under new command, the company is now preparing to increase its export drive, capitalizing on its own competitive advantages, as well as those provided by its operations on Brazilian soil. "We will double exports by 2003," boasted Gianni Coda, general director of one of Fiat SpA's four divisions in Turim, Italy and until early this year, former CEO of the Brazilian outfit, a position taken over by Alberto Ghiglieno, who in turn was the former purchasing director of the group in Europe. With the experience and success obtained in Brazil since his arrival in August 1999, Coda was promoted to the second position in the Italian group's hierarchy, assuming the most important division that unites Fiat's automobile business, Lancia and light commercial vehicles. The other three areas include Alfa Romeo, Development of International Business and the Services divisions.
The new head of Fiat's Brazilian operation does not only share the same objectives of his predecessor, but also forecasts a growth of between 3% and 5% in the domestic market. "Our market share should reach between 26% and 27%," estimates Ghiglieno. The biggest Fiat operation outside Italian soil, Brazil is recognized by the group's international area directors as the auto hub of global importance due to the size of its domestic market, the large supply of inputs at competitive prices and the advances in productivity. Last year, Fiat's Brazilian subsidiary exported 53,000 vehicles, the majority destined to the European market, representing US$ 500 million in revenue. Based on the group's forecasts, shipments should reach 100,000 units in 2003. For Latin America, the company intends to double sales from 25,000 to 50,000 units by 2003-a robust advance considering the 18,000 vehicles sold in 2000.
Under the group's new strategy, Latin America will be the priority export region for Fiat's Brazilian subsidiary, while Europe continues as an important market and is set to absorb 70% of shipments in 2003. The top seller is the Palio model, launched globally in Brazil in 1996 and which gained a new line in 2001. "Until 2003, however, exports will be divvied up equally between Europe and Latin America," explained Lélio Ramos, the company's commercial director. Expansion in the Latin American market will already begin in this half with shipments of the utility model Doblò, launched in Brazil this past October. Some R$ 280 million was invested in the model, which is slated for launch in 14 Latin American countries in regional presentations. "Our goal is to export 2,500 units of the new model to Latin America this year," affirmed Ramos.
AUTO SECTOR ACCELARATES EXPORTS
The National Automakers Association (Anfavea) hopes that its members' exports will grow some 10% this year, reaching a total US$ 4.5 billion in sales abroad, compared to US$ 4.1 billion in 2001. From 2000 until last year, the sector's total exports expanded 4.43%. With the 5% increase in total production (1.87 million units), the entity expects domestic vehicle sales to go up 3% to 1.64 million units. Besides Fiat and Volkswagen which, together, have shipped US$ 1.75 billion, the main carmakers that operate on the external market are precisely the largest players on the domestic front: General Motors (GM) and Ford.
GM do Brasil was ranked second in export volume, with sales abroad totaling US$ 705.4 million, compared to US$ 572.6 million in 2000. This year, the carmaker forecasts a 10% increase in export value. China, Mexico, Venezuela, Chile, Argentina, India and South Africa are the main buyers of Brazilian-assembled vehicles. The company also closed a contract with Egypt for US$ 200 million worth of exports. Ford, for its part, had projected exports of US$ 300 million last year, overshooting its target by 50%. The carmaker will slate for export between 10% and 15% of its output of the Amazon, the new global model to be produced this year in Camaçari, in Bahia state. Of the carmakers installed in the country, the most active in trade is Volkswagen, with US$ 1.271 billion in exports last year.
This value surpassed the company's US$ 1.2 billion export target and is equivalent to roughly 2.2% of Brazilian sales abroad, which totaled US$ 58.22 billion from January to December, according to official data. Herbert Demel, president of Volkswagen's Brazilian subsidiary, forecasts a 10% rise in exports this year, with an increase in orders mainly to Latin America. In addition to this market and North America, the carmaker is working to boost sales to Africa, Europe and the Middle East.
The Brazilian factory in Betim continues to be a fundamental hub for Fiat in Latin America, since the company decided to adjust production at the Córdoba factory in Argentina to the new market reality: local output, which hit 30,000 vehicles in 2001, should reach a maximum 12,000 units this year. With a 500,000-vehicle output per year, the Betim factory has already placed seven million vehicles on the streets, 2.4 million of which were shipped abroad. Fiat's Brazilian subsidiary is also highlighted for its engine production and exports. Roughly 430,000 engines of the Fire and Fiasa models are exported annually to Poland, Turkey and Italy.
Despite the announcement of a global restructuring plan by the group, the directors of the Brazilian subsidiary assure that the adjustments carried out in Betim over the last few years-cost reduction, outsourcing and the reorganization of its dealership network-, have been more than enough. Proof of this is the company's results: a R$ 228 million profit last year.
Fonte: Revista BrazilNow, 2002.
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