26 PERSPECTIVAS | OUTLOOK | PANORAMA Fenabrave forecasts the same revenue as in 2022, Anfavea 3% growth, and Sindipeças 6% growth Cautious forecasts for 2023 Unlike 2022, in which production was hampered by a shortage of semiconductors, 2023 began with evident concern from leaders in the automotive sector about high interest rates and difficulties in obtaining credit, which could scare buyers off. The first two months showed this fear was justified and everything indicates that Anfavea and Fenabrave were right in making conservative forecasts for the Brazilian market, with a shortage of demand and not supply. Fenabrave forecasts the same volume of registrations as in 2022, which stood at 2.1 million light and heavy vehicles, while Anfavea estimates very modest growth of 3% in the total number of cars, light commercial vehicles, trucks and buses to be sold in Brazil. Vehicle production in Brazil is expected to grow by only 2.2%, to around 2.42 million units. Fenabrave, which represents dealers, chose this year not to separate estimates for the light and heavy segments. Anfavea, which represents automakers, forecasts a 4.2% increase in sales of cars and light commercial vehicles – from 1.96 million to 2.04 million – and an 11.1% drop in heavy vehicles, from 144,000 to 128,000 units. The fall is down to the introduction of Euro 6 technology in January, which increased truck prices by about 25%. When announcing the entity’s vision for the year, the president of Anfavea, Márcio de Lima Leite, said that he hoped that the initial projections would prove to be wrong. “I hope that we will review the figures upwards throughout the year and that we again see the 2.8 million registrations there were in 2019. But at first we’re conservative.” To ensure investments in local production, Anfavea began 2023 by negotiating a priority agenda with the government, whose main points are reindustrialization and strengthening of the supply chain, decarbonization (electrification, biofuels, gas), fleet renewal and vehicle inspection, as well as stimulating R&D, a return to payments in instalments, reduction of the Brazil cost and tax, among other items. Fenabrave also took into account high interest rates and high default levels, and more limited income growth in 2023, in making this year’s cautious projections. “If there is no news, repeating 2022 will be a good result,” said the president of the entity, José Maurício Andreta Jr. “There are still uncertainties, and we need to wait for the next few months,” said the executive, referring to the change of the economic team in a new government. The tax burden - Like Anfavea and Fenabrave, Sindipeças also admits that it may change its forecasts throughout the year. It initially forecasts 6% growth in revenue for the auto parts industry, to R$ 202.7 billion. Cláudio Sahad, president of Sindipeças, says that the sector remains steady in its recovery from the Covid-19 pandemic and the shortage of semiconductors. He points out, however, that Brazil, like Mexico, could be favored by nearshoring. “In thiscontext, I would like to highlight some factors that greatly affect the competitiveness of all sectors of domestic industry. First, the tax issue: our burden is 33%, compared with 18% in Mexico. In addition, we need to work on fighting corruption, improving legal certainty, and investing in transport infrastructure,” Sahad says. Among other forecasts, Sindipeças expects exports of around US$ 8.5 billion, up by 6.3%, and imports around US$ 17.5 billion, down by 12.1%. The trade deficit will be reduced by 24.4%, falling from US$ 11.9 billion to US$ 9 billion. Another positive is employment in the sector, which grew by 4.2% in 2022, to 277,700 people, and it is expected to increase by 0.5%, to 279,100 people. The auto parts industry is to invest an estimated US$ 1.1 billion this year in Brazil. Transport - Regarding the estimates for 2023, the president of NTC&Logística, Francisco Pelucio, points to a survey by the entity that showed the expectations in the sector are not good neither for this year or next year. “27% believe that the market will improve, 33% that it will get worse, and 41% that it will remain stable.” “I believe that such expectations are linked to the change of government, which has brought about some uncertainty, especially on the economic side,” he says. “In addition, the war between Ukraine and Russia persists and there are also doubts about how the world’s major economies will perform.” In any case, the president of NTC&Logística says that the sector hopes that the new government can somehow invest more in road infrastructure. “At least the announced budget is already much larger than the last few years, and we hope it is used well,” he adds. Pelucio recalled that transportation, by its nature, depends directly on economic performance. “Its GDP varies from two to three times Brazil’s overall GDP,” he says. Regarding the recent challenges faced by the sector, the executive says the biggest has been to pass on steep input price rises to clients, especially in the last two years: vehicles (+66.7%), labor (+20.6%), and fuel (+ 71.7%).
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