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Commercial Vehicles and Off Road Machines - Brazil
April, 30th 2020
Carlos Alberto Briganti
About us
Products and Services
Content
• Power Systems Research
• Overview
• Volumes – actual/fcst
- Commercial Vehicles - > 6 ton
- Agricultural Machines
- Construction Machines
• 2020 – LARGEST GRAIN CROPS OF THE HYSTORY
• GOOD PRICES PRICES FOR AGRICULTURAL AND MINING COMMODITIES: Soyo Bean and Iron Ore
• POTENTIAL INFRASTRUCTURE INVESTMENT
• ROAD TRANSPORTATION ESSENTIAL ACTIVITIY IN THE CRISIS
• RECOVERY EXPECTATION : Starting Q3/20, Normal activities: Q4/20
• REDUCTION OF INTERESTED RATE TO LOWEST LEVEL OF THE HYSTORY
• CREDIT AVAILABILITY FOR AGRICULTURE
• OEM´s PRODUCTION LOCKDOWN
• CASH SHORTAGE – Mainly in the Tier 2&3 Sypply Chain
• GDP: Reduction of 4/5% in 2020. Recovery of 2/3% em 2021
• INCREASE OF PUBLIC DEFICIT : Restriction of government investment
• INCREASE OF UNEMPLOYMENT
• HEALTHY/ECONOMIC/POLITICAL CRISIS – “PERFECT STORM”
• CONFIDENCE IMPACTED BY UNCERTANTIES
• GLOBAL RECESSION IMPACTING VEHICLES AND MACHINES EXPORT
Overview
Infrastructure Investment in Brazil
Source: FIESP - 13º Construbusiness, 2017/ Valor Setorial, 2018
36%
31%
13%
11%
9%
Infrastructure Investment Pent Demand
Roads, Railway, Ports, Airports
Electricity
Sanitation
Telecom
Mobility
5,5% of GDP
R$ 350 Bi/y
2018-2038
5.50%
3.62%
2.27% 2.12%
1.40%
1970 1980 1990 2000 2017
Infrastructure Investment (% GDP)
2019
GDP – R$ 7,44 trilhões
Infrastructure – R$ 135 bilhões (1,88%)
Action Plan in the crisisGovernment Investment: R$ 30 bilhões
Search for private/foreing investment: R$ 600 bilhões
149.2 162.8 166.2188.7 193.6 207.8
186.4
237 225.6 242.1 252293.5
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2027/28
Grains harvester production (x 1.000.000 t)
47.4 49.9 50.9 53.6 57.1 57.9 58.2 60.9 61.5 63.2 65.169.5
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2027/28
Planted Area (x 1.000.000 ha)
Brazil – Agribusiness Productivity
Fonte: CONAB / Embrapa
Off Road Machines – PRODUCTS COVERAGE
Wheel Tractors
Dozers
Combines
Harvesters
Sprayers
Excavators
Backhoes
Motor Graders
Mini Excavators
Pavers
Rollers
Tree Harvester
PSR
Wheel Tractors
Dozers
Combines
Harvesters
Backhoes
AGCO
Agrale
CaterpillarCNH Industrial
John Deere
Komatsu
AGCOAgrale
Caterpillar
CNH Industrial
John Deere
Komatsu
Ammann
Bomag Marini
Budny
Dynapac
Hyundai Construction
Jan
JCBKUHN
Landini TratoresLiebherr
LiuGong
LS Tractor
Mahindra
Jacto
Randon
Romanelli
Sany
Stara
Valtra
Volvo CE
Weber
XCMGYanmar
Off Road Machines – OEM’s COVERAGE
PSR
78 79
91
81
6057
6370
60
51
62
76 76
87
77
5955
5965
5548
57
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Production (x1000) Sales (x1000)
Agricultural Machines – Production & SalesAct/Fcst
• Agribusiness keeping productivity and growth
• Reduction in 2019 due credit constrain
• COVID 19 in 2020 impacting normal business
• Tight cash control during crisis
• Anticipation of fertilizers purchase
• Global recession impacting machines export
80k
60k
Source: PSR OE LinkTM (Production and Sales)
• Productivity
• Low interest rate
• Credit availability
• High commodities price
• Potential pre-buy due credit and
interest rate
• Political and economical crisis
• Credit restriction
• Fertilizers cost going up
• Commodities prices going
down
30 29
32
26
15 16 17
22
26
20
2424 23
32
25
12
87
14
18
14
18
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Production (x1000) Sales (x1000)
Construction Machines: Production & SalesAct/Fcst
• Recovery started with exports in 2017
• Utilization of CE machines in Agriculture
• Construction moving down after recovering in 2019
• Covid19 in 2020 impacting normal business
• Potential investment in infrastructure would accelerate recovery
• Global recession impacting machines exports
30k
16k
Source: PSR OE LinkTM (Production and Sales)
• World Cup
• Olympic games
• Government incentive program
• 6,000 machines donated to
town halls
• Low interest rate
• Newcomers
• OEMs Capacity Expansion
• Market of 32000 units
• Political and economical
crisis
• Infrastructure on hold
• Some newcomers phasing
out
• Mining – commodities prices
down
• Credit restriction
• Interest rate raising
223
171
94
77
101
132 140
87
133
182
161
85
58 60
87
117
76
117
-
50
100
150
200
250
2013 2014 2015 2016 2017 2018 2019 2020 2021
TSD
Commercial Vehicles: Production & Sales Act / Fcst
Source: PSR CV LinkTM (Production and Sales) and ANFAVEA
200k
90k
• Interest rate below inflation
• Credit availability
• Potential pre-buy
• Recovery started in 2018
• Covid19 impacting normal business in 2020
• Bus segment more impacted than Heavy trucks
• Global recession impacting vehicles export
• Potential recovery in 2021 to the same Sales level of 2019.
• Political and economical crisis
• Infrastructure on hold
• Some newcomers phasing out
• Currency depreciation
• Credit restriction
• Interest rate raising
Carlos A. BrigantiManaging Director South America
+55 19 99183 3330
+55 19 3305 5657
Thank you!