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
ANFAVEA -
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.
ABEIFA -
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.
ANFIR -
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:
- motorcycles
- cars
- light commercial
vehicles
- trucks
- bus and coach
- agricultural
equipment
- construction
equipment
- engines
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').
Renault
Dcross
Ford Evos
Coupe
Troller R-X
2013 – Nissan Urban
Rally Extrem
2014 – Renault
(Dacia) Duster Oroch pick-up
Chevrolet
Onix 'Track-Day' (altered production car)
Renault
Kwid
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.
Government -
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:
Established
in 1999, the Ministry of Industry, Foreign Trade and Services is
responsible for the following subjects:
-
Development policy on industry, trade and services;
-
Intellectual property and technology transfer;
-
Metrology, standardization and industrial quality;
-
Foreign trade policy;
-
Regulation and implementation of programs and activities related to
foreign trade;
-
Assess and apply trade remedies;
-
Participation in international trade negotiations.
To
accomplish its goals, the Ministry acts through four Secretariats:
-
Secretariat of Industrial Development and Competitiveness (SDCI);
-
Secretariat of Foreign Trade (SECEX);
-
Secretariat of Trade and Services (SCS);
-
Secretariat of Innovation and New Business (SINN).
The
Ministry also hosts and chairs the ministerial council of the
National Council of Export Processing Zones (CZPE).
The
following entities are linked to the Ministry of Industry,
Foreign Trade and Service:
-
Superintendency of the Manus Free Trade Zone (SUFRAMA)
-
National Institute of Industrial Property (INPI)
-
National Institute of Metrology, Quality and Technology (INMETRO)
There
are also private non-profit organizations that receive resources from
the Ministry for public interest actions:
-
Brazilian Industrial Development Agency (ABDI)
Mission:
To
formulate, implement and evaluate public policies, in order to
promote competitiveness, foreign trade, investment, business
innovation and consumer welfare.
Vision:
To
be a reference in the management of public policies, in order to
strengthen the competitiveness of Brazilian companies.
Secretariat
of Industrial Development and Competitiveness :
The
Secretariat of Industrial Development and Competitiveness (SDCI) is
the main governmental body designated to elaborate, manage and
monitor industrial policy. In the context of finalistic macro
processes, SDCI acts as an instance for receiving and processing
national private sector demands, identifying structural bottlenecks
and seeking ways to foster business environment and industrial
competitiveness. SDCI operates through the improvement and
simplification of regulatory and fiscal mechanisms, financing and
investment, besides monitoring consolidated industrial policy
instruments.This Secretariat aims to foster industrial development
and competitiveness through actions designed to strengthen industrial
development, such as granting competitive stimulus to the productive
sector.
Secretariat
of Foreign Trade :
The
Secretariat of Foreign Trade develops, implements and monitors
foreign trade policies and programs, and also establishes necessary
standards and procedures in order to properly implement these
policies. It also carries out sectorial guidelines for foreign trade
of goods, encompassing both those set by domestic legislation and by
international agreements.
Furthermore,
the Secretariat manages the Integrated System of Statistics on Trade
(SISCOMEX), which collects data from and optimizes Brazilian
international trade. Finally, the Secretariat also undertakes the
trade remedies procedures, in full-compliance with WTO normative.
Secretariat
of Commerce and Services :
The
competences of the Secretariat of Commerce and Services encompasses
the development, coordination, implementation and evaluation of
public policies, programs and actions regarding the development of
commerce and services sectors, both at domestic level as abroad. The
Secretariat is also responsible for analysing and monitoring these
sectors trends within Brazil and abroad, as well as for designing and
publishing relevant information regarding services trade.
Additionally,
the Secretariat is in charge of managing the Integrated System of
Statistics on Trade of Services (SISCOSERV) as well as other programs
for fostering commerce and services sectors in Brazil.
Secretariat
of Innovation and New Businesses :
The
Secretariat of Innovation and New Businesses is the main government
actor in charge of connecting public policies on innovation with
private sector demands, focusing on entrepreneurship and technology
innovation. It aims to promote innovation within Brazilian companies
through mechanisms designed to support and foster the culture of
innovation. Also, the Secretariat takes active part in elaborating
innovation policies, in order to increase competitiveness to goods
and services manufacturing, and monitors policies on Intellectual
Property.
Among
its main activities are: the development of fiscal, financial and
regulatory incentives for the development and use of green
technologies; the public-private partnership on innovation policies
and its results; qualification in strategic and technology-based
industries to meet market demands; reorientation of instruments to
support innovation for competitiveness in companies; and the
attraction of global centers of R&D.
Summary -
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.
