The following reviews how the mix of MNC 'transplanted' brands and domestic participants have over the decades formed themselves into professional SIG associations to operate as coordinated administrators, lobbyists and promoters.
9. Sector Promotion
The earliest established representative association, 'Associacao Nacional dos Fabricantes de Veiculos Automotores' (the National Assoc of Motor Vehicle Manufacturers) was born in 1956, and celebrated its 60th anniversary recently.
Given the importance of assisting in the co-ordination of national industrial policy at its watershed period in the mid 1950s, it took on the broad umbrella interests of all producers, across passenger cars, vans, pick-up trucks, heavy goods vehicles and buses and coaches, with later inclusion of the typically specialist manufacturers of a broad range of defence orientated, agricultural and 'off-highway' equipment.
As such it is the voice of the indigenous automotive sector, indeed the broad wheel-motive transport sector, highlighting its own self-promotion in the fact that 70m of the 78m vehicles produced in the modern era have been domestically produced and used.
A major step forward was its prominence in the mid 1980s when it coordinated the creation of an industry-wide electronic data information exchange, the EDI database itself critical in disseminating vital information regards the technical specifications of components and design and manufacturing capabilities, allowing for advancement and efficiency across many areas, from vehicle design and re-design at the 'front-end' of the engineering process through to the ability of dealers to maintain near like for like parts stock/inventory keeping to allow for the retro-fit of officially discontinued parts, so extending the life-span of older vehicles in use for the soon to be burgeoning used-vehicle markets of the 1990s, from trucks to cars.
In this way ANFAVEA's push for EDI boosted much in the way of automotive productivity, in design, production and use, from the scale of the factory floor to (for a long period) the ability for small-time entrepreneurs to profit as more reliable used-vehicle intermediaries.
This type of proactive influence was driven by its industry members, the list of which has continually grown since its earliest days and spans all indigenous and foreign-transplanted vehicle producing companies. The old-time yesteryear intimacy of industry representation continues to this day, with the vast majority of its members recognised as 'Vice-Presidents' (spanning AGCO to COAO to John Deere to Hyundai to Jaguar Land-Rover to Komatsu to Mahindra to MAN to PSA to Scania...with many others besides). Representational terms last 3 years with the current senior positions of President and '1st V-P' held by Volkswagen and Ford.
In what historically was a fragile internal economy for so long, the rise of close relationships within such a central body, and so across member companies, was inevitable. Members able to create and make good use of its slowly expanded services, but with specific reliance upon the sharing, collation and interpretation of market statistics; thus sensitively propelling either domestic and foreign investment expansion, keeping 'steady-state' conditions so as to better amortise such costs, or indeed any necessary TIV contraction and thus re-investment delays.
This body was formed in 1991 at the time Brazil was once again opening its doors to the world. It was in reaction to Brazilian entrepreneurs with interests in the potential of imported (status and entry level) vehicles into the country, to satisfy what appeared the two prime market segments that had been under-served in previous years.
[NB ABEIVA is the acronym for 'Associacao Brasileira das Emprasas Importadoras de Veiculos Automotores' which when also embracing / absorbing a new set of foreign 'transplant' companies became known as ABEIFA (the 'F' reflecting the 'Fabricant' manufacturing element].
Initially Germany's BMW was attracted, followed by the stark counterpoint of an affordable Russian brand with LADA; these prompting actions and the potential of the whole market thereafter also drawing in France's Citroen and Japan's Mitsubishi. By 1995 a full thirty (30) international brands had become affiliate members – spanning European luxury and sports 'craft' producers to all global mass manufacturers, with some names more recently supplanted by the continued massive influence of China.
Today ABEIFA's members roster consists of: Aston Martin, Rolls Royce, Jaguar Land-Rover, Mini, Volvo, Porsche, BMW, Maserati, Ferrari, Lamborghini, Suzuki, KIA, Geely, Chery, JAC, BYD and Lifan. Thus it must reflect the importation and transplant interests of a wide variety of members with both aligned and disparate individual agendas.
The body is currently managed by six people, acting in the capacity of: Presidend, Vice-President, Administrative Officer, Chief Financial Officer, Government Relations Director and a CEO / Investments Officer; each whose full-time role is as senior manager of one of the member corporations. Supporting these are 16 others in 'Consulting' and 'Work Committee' roles who offer critical administrative and technical knowledge; again whose 'day jobs' are within a member company.
As with ANFAVEA, statistical records are a cornerstone of the organisation, by which members can both gauge the health of Brazilian production and foreign importation, and as necessary use those figures for lobbying and comparison purposes.
As an example the month of December 2016 saw BMW produce 8,424 vehicles (1-series, 3-series, X1-series, X3-series and X4-series), Suzuki assemble 1,503 Jimny models, Chery manufacture 1,401 vehicles (Celar, Celar sedan and QQ), Land Rover produce 746 vehicles (Evoque and Discovery) and MINI assemble 239 vehicles (Countryman and Cooper S).
These 12,313 cars however represent only about third of the 35,852 cars imported – themselves limited in demand volume by substantial import taxes. So illustrating the present small level of domestic supply vs shipped-in, and more importantly, the potential to scale up manufacturing in the future (as Brazil rebounds) to meet an uplift in consumer demand under a reduced tax regime for the premium status, leisure off-road, and entry-level segments.
The problem for the transplant corporations though is the manner in which they balance capacity investment in local factories against the rise in demand, itself constrained by domestic vs import tariff policy. This is undoubtedly a prime agenda item for the representational organisation.
However, it must be noted that the membership itself consists of very varied mix of players each with varied domestic market impact. This seen again with the Dec 2016 figures once again. Whilst BMW imported 3,412 cars, and Land Rover's model driven resurgence gave 5,926 vehicles, Aston Martin only imported 2 cars, whilst Lamborghini did so with 4 cars. Between these extremes stood the remaining very varied range of brands and spectrum of volumes.
This issue of the need to re-balance the very wide gap between production vs import volumes (and the commensurate underlying business needs) that provides ABEIFA with its increasingly pertinent raison d'etre; and thus its prime differentiation to ANFAVEA.
Established in 1980, this organisation is primarily concerned with representing those companies which manufacture trailers and bodies in the trucking and cargo/logistics industry. ANFIR is the acronym for 'Associacio Nacional dos Fabricantes de Implementos Rodoviarios'. Given Brazil's geographical size and its broad history of transport enabled industrialisation, it is little surprise that today the body comprises of a plethora of member companies, apparently about 1,300, from small local trucking firms to major conglomerates; having started from the mutual interests of 13 founder companies. Today the membership A-Z spans 'Auto Clara' to 'Zian de Amazonia'.
Like its peer organisations in the car world, ANFIR operates as coordinator and lobbyist, with a members' service focus upon production and market statistics, regulatory standards, technical matters and singular legal representation. Furthermore, with members reliant upon the positive advancement of the broad economy – which encourages trade and infrastructure and so propels road transportation – it has increasingly become involved with national development issues, espousing itself as doing so with a social consciousness.
Concerned with all 'road operational equipment' spanning various specialist items, the predominance of interests relates to the trailer and truck body sector, itself literally closely coupled with the offerings of truck producers. These on-chassis and towed vehicles span much from basic flat-beds to tankers to container beds to box-sides to curtain-sides and tailor-made (SVO) loading and storage solutions, and in the semi-trailer sphere span both single and double articulated trailers, with the obvious ability to inter-link and so create road-trains.
[NB The topic of long-range transportation across Brazil and LatAm set in a future of ever greater digital interconnection, with the idea of distinct hybrid and EV 'power units' within a road-train – akin to railway carriage application - indicates that ANFIR should seek to broaden its coverage to include 'digital development' within its technical strategy outlook].
As part of its remit ANFIR assists in the sector exhibition and conference that is FANETRAN; itself held every second year. This exhibition dedicated to the haulage industry illustrating not only current products (trucks, trailers, special equipment etc) to promote immediate B2B trade, but also as a display for applied and commercialised research and development projects.
SINDIPECAS and ABIPECAS -
These conjoined organisations represent component producers. The former 'Sindicato Nacional da Industria de Componentes para Veiculos Automotores' and the latter 'Associacao Brasileira da Industra de Autopecas'.
These bodies have about 500 enterprise members from small to large, which supply directly to Brazilian and foreign vehicle assemblers (as the OEM providers) and to the After-Market as both OEM and 'pattern-part' providers.
The four prime areas of concern are:
- to stimulate industry growth
- to inform and train
- industry representation
- sector coordination and support
Unlike the specific sector representation of ANFAVEA and its direct peers, this organisation necessarily spans many segments and sectors given its micro-orientation on parts supply:
- light commercial vehicles
- bus and coach
- agricultural equipment
- construction equipment
Its A-Z members listing spans varied companies from: AAM do Brasil (transmissions and axles) to ZM Industria (alternators and starter motors).
The Sao Poalo International Auto Show -
The official title of this annual landmark event is the 'Salao Internacional do Automovel de Sao Paulo'.
First held in 1960 it showcased the ambition of the then newly reformed country, very early on (early to mid 1960s) it sought to showcase Brazil's tremendous automotive accomplishments across the board.
Nigh on immediate achievements in three spheres: the mass manufacture of cornerstone 'bread-and-butter' vehicles that would mobilise the economy with the VW Type 1 and Type 2 et al; the rise of home-grown niche producers with the then new and exciting business models at the top of the value-ladder with the hand-built sportscars and luxury GT cars; and the combination of the best of both these worlds with the 'personal car' in the form of the VW-Karmann Ghia); as well as the luxurious large sporting sedan with the 'JK' from FNM.
Thus in its first half-decade or so, as vital part of the economic drive for revitalisation, the show was prolific. Promising much to both the populace and industry alike, at home and potentially abroad, so cementing the importance and aspiration of the auto-sector within the foundations of national economic activity.
To serve the 'wind of modernity' increasingly seen all around through regional planning, architecture and transport, by 1970 the Salon event was relocated to the newly constructed, well planned/integrated and massive Anhembi Parque Convention Centre in the Santana district, (its home for the next 34 years).
Whilst the USA, UK and Europe had entered recession by 1970, the momentum of that 'Brazilian promise' was still evident in the 1970s, even if the previous swathes of FDI had contracted and the onus was on government and local industry to maintain momentum. Yes the previous frenetic pace of socio-economic change had slowed because of the western woes, but in an historical context the times were still good and any pessimism countered with jingoistic fervency.
The taps of newly created consumer credit were opened further and a new generation of more affordable patriotic vehicles showcased: with the VW Brasilia, FIAT Panorama and an expanded Gurgel range and VW Gol exemplifying Brazilian pride.
Although four decades ago those glory days of Brazil's former march still echoed in the Anhembi Parque Convention Centre for the following years, with the late 1990s boom-time and new nationalistic models like the FIAT Palio and later Nuvo Uno themselves echoes of the romanticised early days.
Nonethless, as a convention, business and even resort hub with good land and air inter-connections, the Anhembi had played a major role in communicating the much developed strengths and capabilities of the nation's auto-sector to both inward and outward audiences.
The Sao Paulo show moved as of 2015-16 to the refurbished 'Expo' Centre, which has a foot-print over 8,000 square metres greater (100,000 sq m vs the previous 92,000) and very probably the offer of reduced event costs for organisers and so participants.
Given the demands of major infrastructure overhaul for the 2016 Olympics and Paralympics upon the city's infrastructure, its inevitability to over-shadow other usual events, and the impact of the 2014 economic slowdown, it was deemed appropriate to post-pone the Salon.
FENATRAN is the trade show for the Transport/Haulage sector and has been likewise held at the Anhembi Centre for many years, with AUTOCOM focused upon the realm of on-board/external diagnostics, fleet inter-communications and infotainment.
Concept Cars -
The history of Brazilian concept cars is a true mixed bag.
From radical indigenous hand-builds of the early 1960s through to dilution of the term since the 1990s onward (when deployed as empty PR short-hand for a near production ready new version of a standard model).
Unlike centres such as Detroit, Frankfurt, Tokyo etc steeped in the old heartlands of car companies and where true firsts are typically showcased, the previous 'back-water' that was Sao Paulo has had to perhaps overstate itself on the international stage.
However, unlike new limited edition variants in 'advanced markets' which have typically little impact, the fact is that in Brazil new variant lines inevitably of the sporting or cross-over ilk have had far greater impact on the public's consciousness, desire and purse; thus whilst appearing somewhat naïve in its obviousness, the fact is that the high visual impact of a 'street style' has proven as the magical formulae for the sales of both life-extended models and today's shortened period for face-lift and special edition models; FIAT Palio 'Interlagos' spawning the likes of the Chevy Onix 'Track Day'.
This recognised, the fact that Brazil has become far more of a new model development homeland has meant that a new breed of truly home-grown, pan-EM and even EM-AM targeted products have first seen the light as true concept cars.
And moreover, to help stir the imagination and attract brand-specific attention from the future Brazilian buyer (many within the youth cohort) more and more radical concepts are being shown with recognition that the aesthetic and functionality will be diluted in the factory model years later.
A few examples of the inevitable 'mixed-bag' are:
2006 – FIAT FCC I 'cross-over' coupe
2008 – FIAT FCC II 'hi-style' off-road buggy
2009 – FIAT Mio 'city-pod'
2012 - VW Buggy
(VW farewell to Type 2 'Kombi').
Ford Evos Coupe
2013 – Nissan Urban Rally Extrem
2014 – Renault (Dacia) Duster Oroch pick-up
Chevrolet Onix 'Track-Day' (altered production car)
2015 – Nissan Kicks
Ford Eco-Sport re-body
2016 – Hyundai Creta pick-up
Renault Kwid Outsider
With further exploration of the matter it can be seen that the hi-concept design studies were relatively prevalent a decade ago when FIAT, wishing to maintain its market profile and lead, offered a sense of the near and distant futures over a three year span. Tellingly, to both maintain immediate public interest in “adventuristic” vehicle whose characterisation has been well received, whilst also pointing to the “shape of things to come” with highly efficient small-scale 'city-pod' transport.
Since then the offerings of all manufacturers – though named concepts -are largely either hyper-styled variants of production vehicles soon to be launched, or conceptual evocation of specific segment evolution. Medium and small Cross-Overs and Pick-Ups are already well proven boom segments that have a broad stylistic and specifications envelope from which to generate ever more consumer demand, the power of the SUV styling already seen to influence the face-lift and next generation aesthetics across a brands complete vehicle range.
The three primary ministerial departments which promote and police the intricate dealings of the national automotive and transportation sectors are:
1. (Development), Industry, Foreign Trade and Services
2. Transportation, Ports and Aviation
3. Science, Technology, Innovation and Communications
The first of these and is formally titled 'Ministerio do Desenvolvimento, Industria, e Comercio Exterior' (the MDIC) and has a wide span of involvement.
The following is a literal 'cut and paste' of the department's website so that nothing be lost in possible erroneous transcript:
Thus history of the automotive and transport sectors illustrate a direct correlation between the embracing of Brazil's “open door” policy and the pace of internal change within these specific sectors.
As seen that response was the formation of many intermediaries from both sides of the industrial and governmental interface. The agencies being:
ANFAVEA, ABEIFA, ANFIR, SINDIPECAS/ABIPECAS, the Soa Paulo International Auto Show, FENETRAN and the numerous publicly absorbing concept cars and showcase technologies. These bodies and events in turn influencing the purpose and formation of government, with its primary ministeries: (Development), Industry, Foreign Trade and Services / Transportation, Ports and Aviation / Science, Technology, Innovation and Communications.
It was obvious recognition of the need to handle the opportunities arising from globalisation and the desire for a robust, internationalist domestic economy that brought unabashed corporate self-interest into being. But such thrusts forward generate important internal discussions inside industries and with government, as how to best meld, satisfy and indeed promote (via various roads of creative destruction) often disparate demands.
This formation of today's present status quo has occurred at a seemingly glacial basis over the decades, each respective association emergent from a conflux of multi-interests, each seeking to create a confluence of interests and so more harmonious future change.
Such internalised understanding about the prime micro and macro issues of today and tomorrow is vital to absorb the pace of change and provide adroit reaction to the moulding of the 'new norm'; this spanning much; from the threat of ongoing currency wars and increased possible tendency toward retracted semi-isolationism at the individual country level, versus the continued need for ever more inclusive thinking and solutions at the G20 level regards global-warming and sustainability, with the efficiency of intelligently networked cyber-mobility offering solutions, added to which is the issue of global wealth rebalancing, now not simply toward those poorest in EM regions but also today, to halt global fractures, also toward the 'new poor' in notional AM regions.
Having made greater strides in EM and AM spheres with a 'socio-commercial' mentality, Brazil will seek to continue to be part of such a "solutions for all" internationalist ethos.