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Brazil becomes automotive engineering export base

With advanced and internationally competitive engineering, Brazil is starting to establish itself as an export base for automotive technology, while reducing the production of vehicles to the foreign market. “I see tremendous potential for the country to develop and export technology to the world,” says Ray Young, president of Mercosur’s General Motors (GM).

Brazilian technological solutions attract attention abroad. According to Young, GM’s Chinese subsidiary is interested in flex fuel. Recently, an entourage with members of the National Association of Automobile Manufacturers (Anfavea) and representatives of Petrobras and the government has landed in South Africa to negotiate the development of bi-fuel technology in Brazil. “As oil is becoming very expensive, flex fuel is an alternative seen with good eyes abroad, “says Young.

The GM Research and Development Center is among the five best in the world. Eighty-five Brazilian GM engineers are scattered around the world. In recent months, two have gone to Korea, which in October will send one to Brazil. “We are tightening ties with our Korean subsidiary,” says Young. So the automaker intends to spend 24 hours a day developing new vehicles, taking advantage of the time zone.

The confidence in the Brazilian technology is so great that the new average pickup that the assembler intends to launch in the world market will be developed in the Country. According to Young, 81% of the internal sales of GM in 2005 were of models developed in the Country. this slice should reach 85%. “Our goal for 2010 is to be close to 100%,” he says. In order to do so, the automaker will direct most of the US $ 500 million invested per year in the country. The focus will be on affordable technology, that is, low cost solutions that adapt to the national market.

In the boom of bi-fuel technology, Bosch developed Flex Start, which will solve the problem of using gasoline to start the engine. When the alcohol is below 15 ° C, it does not ignite and the system needs gasoline to run. With the system, the alcohol is heated and the use of gasoline is dispensable. “It’s a technology that can be exported to other places that use alcohol as fuel, like Sweden,” says Edgar Garbade, president of Bosch. R $ 10 million were invested in the development of technology, which is 100% national. “We already have a partnership with an automaker and we hope to close with others until the launch, scheduled for 2008,” he says.

In addition, the company is investing $ 5 million to adapt the Start Stop, a component management system that automatically shuts off the engine of a car that has been stopped for 20 seconds. With a flick of the clutch, the car is reconnected. The technology, developed in Germany, is expected to be available in Brazil in mid-2008. “I see the market mainly in large centers that suffer from traffic problems,” says Garbade.

Production costs

Although still competitive in development, in productivity the country can no longer be considered low cost. “One hour worked in Brazil is equivalent to two and a half hours in India and two hours in China,” says Young. From January 2003 to August this year, labor costs increased by 25%. With the exchange, the value becomes 90% higher. “Our focus now needs to be the added value, not the low cost,” says the president. He argues that if Brazil does not grow 5% per year, it may lose investments. “We have to have an internal market of 2 million cars a year by 2010, or we will lose the importance in the world market,” he says.


Chinese automakers are preparing their bid in the Brazilian market. According to Young, QQ, a model produced by China’s Cherry Automotive, will be present at the Auto Show held in October in São Paulo. “There are signs that the vehicle will reach the country for R $ 20,000,” he says. The cheapest vehicle on the domestic market today is Fiat’s Mille: R $ 21,600. “

If things continue this way, Brazil can become a supplier of commodities, closing the industry because of the high cost of production, “warns the president. Brazil begins to establish itself as a base for exporting automotive technology to large automakers. According to Ray Young, president of General Motors (GM) Mercosul, 85 Brazilian engineers from GM are scattered around the world. At the same time, the company is opening vacancies for engineers at its Indaiatuba and São Caetano do Sul units, which will be responsible , little by little, by projects that today are developed in Michigan.

Bosch, in turn, has developed Flex Start in the country, a technology that will allow the use of bi-fuel in cold countries for export, and Start Stop, a system that automatically shuts off the engine of a car that has been stopped for 20 seconds.

At the same time, the internal market for vehicles is advancing. The month of August 2006 was the best ever in car sales.

According to figures from the National Federation of the Distribution of Automotive Vehicles (Fenabrave), 169,900 cars and light commercial vehicles were sold in the period, more than in August 1997, when 167,100 cars and light commercial vehicles were sold. Data that the National Association of Automobile Manufacturers (Anfavea) will release today indicate that sales grew about 7.6% in relation to the previous month.

In the United States, in turn, Ford Motor Co. is preparing its third worldwide restructuring in five years. The company’s chief executive, Bill Ford Jr., admits for the first time the possibility of leaving the command.

Source: DCI



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