Brazilian Automotive Market€¦ · © 2017 IHS Markit. All Rights Reserved. 6 Economic Indicators...

© 2017 IHS Markit. All Rights Reserved.© 2017 IHS Markit. All Rights Reserved.

Brazilian Automotive Market Have we reach the tipping point?

April, 2017

Carlos Da Silva, Manager+1 972 581 6668carlos.dasilva@ihsmarkit.com

© 2017 IHS Markit. All Rights Reserved.Source: © 2017 IHS Markit. All Rights Reserved.

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2

© 2017 IHS Markit. All Rights Reserved.

Global light vehicle sales

3

92,2

93,5

+ 0,5

+ 0,3

+ 0,2

+ 0,2

+ 0,2

+ 0,2 - 0,0- 0,2

92,2

92,4

92,6

92,8

93,0

93,2

93,4

93,6

93,8

2016 South Asia West Europe Japan/Korea Central/EastEurope

MiddleEast/Africa

South America Greater China North America 2017

Mill

ion

units

+1.4%

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4

South America sales could return to peak only by the mid-2020s

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0

1

2

3

4

5

6

7

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Milh

ões

Brazil Argentina Chile Colombia Peru Venezuela Others Change

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Brazil outlook summary

5

-6%-4%-2%0%2%4%6%

Real GDP growth

0%

2%

4%

6%

8%

10%

Consumer price inflation

0

1

2

3

4

5

Exchange rate per USD*

*Annual average

02468

101214

Unemployment Rate (%)

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Economic Indicators Signal Stronger Market

-.2

-.1

.0

.1

.2

13.2

13.6

14.0

14.4

14.8

15.2

90 92 94 96 98 00 02 04 06 08 10 12 14

Residual Actual Fitted

-120,000

-80,000

-40,000

0

40,000

80,000

120,000

160,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

03 04 05 06 07 08 09 10 11 12 13 14

Residual Actual Fitted

STM 2014 2015 2016 2017

Total 3,328,017 2,364,025 1,961,671 2,061,591

LTM 2014 2015 2016 2017

Total 3,328,017 2,735,033 2,515,268 2,516,241

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Sales SAAR

7

-500.000

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

4.000.000

4.500.000

5.000.000

jan/

12

jan/

13

jan/

14

jan/

15

jan/

16

jan/

17

jan/

18

PACE LV

Brazil LV

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Brazil light vehicle sales

8

-30%

-20%

-10%

0%

10%

20%

30%

40%

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

Milh

ões

Sales Annual Change

Despite still dire conditions, sales are back but in a much different market

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Brazil light vehicle production

9

-30%

-20%

-10%

0%

10%

20%

30%

0

0,5

1

1,5

2

2,5

3

3,5

4

Milh

ões

Production Annual Change

Export push has ignited the recovery, now also supported locally

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Given sales profile, Brazilian exports to become more important to sustain overall volumes

10

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

Milh

ões Production Sales

Critical period lies in the coming couple of years (adjustment period)

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Brazilian plants utilization is now forecast at 63% in 2017

11

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

Milh

ões

Capacity Utilization

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Exports push is just now combining with renewed product activity and local market uptick

91,80% 91,03% 86,90% 85,03%78,63% 74,58% 72,53%

64,43%

43,62%32,19%

8,2% 9,0% 13,1% 15,0%21,4% 25,4% 27,5%

35,6%

56,4%67,8%

Utilization Rate Idle Capacity

12

Market Average in 2017 – 63.2%

* Hyundai does not include CAOA operations

*

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Thank You, Muito Obrigado, Gracias!Guido Vildozo, Senior Managerguido.vildozo@ihsmarkit.com

Carlos Da Silva, Managercarlos.dasilva@ihsmarkit.com

Fernando Trujillo, Senior Consultantfernando.trujillo@ihsmarkit.com

Roberto Barros, Senior Analystroberto.barros@ihsmarkit.com

João Rebouças, Analystjoao.reboucas@ihsmarkit.com

13