Power Systems Research South America is the leading source of information on engines and power equipment in this dynamic and growing region. We have the broadest and deepest knowledge of South American power product markets available, which provides our customers with the best opportunity for growth. Our local team of industry professionals is supported by our analysts in key markets around the world. Whether you need detailed global data, forecasts or customized local market studies, we can provide you with Powerful Possibilities. Let’s start today.
Taxes on Industrialized Products (IPI) will be reduced by 25% for most of industrialized goods, in a Governmental effort to boost Industry production. The total impact in federal revenue will be US$ 5 billion in 2022.
PSR Analysis: This should affect positively sales and profitability in all engine powered segments. However, profitability should be more impacted than volume. Construction Equipment should have the higher impact as well as spare parts. PSR
Fabio Ferraresi is Director Business Development-South America, for Power Systems Research
The program called Low Carbon FINAME is dedicated to the acquisition of new machines that contribute to carbon emission reduction, with a focus on EV Buses, EV Trucks and Off-Highway Machines electric and Hybrid. OEMs have to register their products before December 2024 to access lower interest rates.
PSR Analysis: The incentives for funding are an important driver to make an EV competitive when compared to an ICE in Brazil, a country with high interest rates and high cost of capital. Historically, lower interest rates caused high sales and bubbles in key segments as CE and MHV. We are closely monitoring the funding conditions and the impact it will bring to key market segments. PSR
Fabio Ferraresi is Director, Business Development-South America, for Power Systems
The 13 liters with Scania Twin SCR aftertreatment developed in Sweden is tested in Brazil for the new Proconve P8 products, already in place for new models and mandatory for all models by January 2023. The homologation process at IBAMA is already advanced but may show adaption needs to Brazilian environment. This engine is part of a completely new powertrain and brakes system with higher efficiency and lower emission. The power range vary from 420 to 560 hp and it is prepared for HVO use.
PSR Analysis: The use of edge technology at Scania Trucks in Brazil is in line with the amount of exports Scania makes to Europe and to lower emission regions. The higher efficiency will bring increased sales to South America as fleet owners seek lower fuel consumption. PSR
Fabio Ferraresi is Director, Business Development-South America, for Power Systems Research
Eve Urban Air Mobility, the branch of aircraft giant Embraer, says it has started the process to register its eVTOL, Electric Vertical Take Off and Landing, vehicle at ANAC, the Brazilian bureau for aircraft certification and tied to international bureaus. Getting this documentation is the most important step for starting its commercial operation programmed for 2026. With this certification Eve will meet international standards of air navigation and safety.
PSR Analysis: Although the aircraft business is not exactly at the scope of products we currently cover, this launch will impact the mobility industry and we are monitoring it closely. Eve has already set 17 partnerships and has a booking of 1700 units, more than many EV makers making a lot of noise in the industry and media. PSR
Fabio Ferraresi is Director, Business Development South America, for Power Systems Research
During the last week of 2021 and the first week of 2022, grain crops faced unfavorable weather conditions. At Mato Grosso and Paraná Regions the lack of rain has been the big problem, while in states like Tocantins and Bahia the problem is an excess of rain, influenced by the climatic phenomenon called La Niña. In some states , such as Paraná, the harvest forecasts are 40% lower than the initial forecast and the losses are estimated at US$ 5 Billion in Paraná.
PSR Analysis: The loss in Agribusiness affects farm cash flow directly and farmer’s ability to invest in Ag Equipment. Moreover, the mood of farmers could be negatively impacted in a year with new waves of COVID 19 and with political instability due to elections. Ag equipment forecasting in 2022 may be challenging and sales results may surprise OEMs, many who expect double digit growth. PSR
Fabio Ferraresi is Director, Business Development South America, for Power Systems Research
The Brazil trailer industry registered 163,000 new license plates in 2021 vs. 122,000 in 2020, growing 33.5%. The result could have been even better since the segment was affected by a lack of components, such as steel, tires, etc. Export sales climbed to 4,600 units vs. 2,100 units in 2021.
PSR Analysis: The growth is in line with truck sales that confirm the health of the transportation industry. The growth of exports confirms the recovery of key markets of Trailers and MHV.
Fabio Ferraresi is Director Business Development-South AmericaforPowerSystems Research
According to Abimaq, the total machine segment, that includes Construction Equipment, Agricultural Equipment, Power Gen-Sets, Industrial Equipment and others, grew 20% in 2021 and should grow more than 4% in 2022. When breaking down by subsegment, ABIMAQ see the segments impacted by infrastructure growing around 15% and the segments impacted by Agriculture growing pushed by the harvest growth.
PSR Analysis: The just released projections are in line with the fourth quarter projections we did for 2022. Our Agricultural Equipment forecast is more conservative than that released by ABIMAQ due to risk factors we see impacting this segment. Indeed, we are already seeing negative news at the harvest due to weather conditions as we are reporting in this PowerTALK Edition. PSR
Fabio Ferraresi is Director Business Development South America, for Power Systems Research
When completing 50 years in Brazil, Cummins announces the arrival of the New Power unit in South America. This includes Electric propulsion, NG Engines, cleaner Diesel Engines, Fuel Cell and mainly Hydrogen.
PSR Analysis: As part of its global strategy, Cummins in South America, leads in the first phase in market niches with NG Engines and follows with other new solutions in the following phases. PSR
Fabio Ferraresi is Director, Business Development South America, for Power Systems Research
The amount is expected to be directed mainly to new technologies, such as for the Proconve P8 introduction in 2023, new technologies for Connectivity and development of sales and aftersales areas.
PSR Analysis: The investment is higher than the former investments cycles but keeps the same line and makes the company one of the most important players in the Truck and Bus industry in South America. With this announcement, VWCO confirms its belief in the Brazilian Market and indicates its willingness to keep its market share lead. PSR
Fabio Ferraresi is Director, Business Development South America, for Power Systems Research
JCB plans to invest R$ 120 million (US$ 20 million) in its factory located in Sorocaba, State of São Paulo, with the objective of increasing annual production capacity from 4,000 to 10,000 units by 2026. JCB expects to grow 50% in sales volume this year, compared to last year’s results, and more than double the sales.
PSR Analysis: With the increased production volume from new products made in Brazil, such as Wheel Loaders, JCB should be above 80% capacity. With the market growth forecast for Brazil, it will be necessary for JCB to increase production capacity. The scenario is slightly different for other players who have higher capacity in their plants in Brazil. PSR
Fabio Ferraresi is Director, Business Development South America, for Power Systems Research
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