An increase in wealth in Argentina and Brazil has led to significant changes in consumer behaviour in both countries and resulted in a boom in their automotive industries. Although the markets have now settled down again, they still have a bright future ahead. The International Automotive Congress – Argentina and Brazil, which took place on 9th October at the Wolfsburg AG Forum AutoVision, clearly illustrated the fact that a wide range of high-potential opportunities is still available to European automotive manufacturers and supplier companies interested in benefiting from involvement in the South American market. Automotive experts from Argentina, Brazil and Germany gathered at the event to provide over 200 interested participants with valuable insights into the prospects, perspectives and framework conditions offered by the South American market. The Congress also kicked off the 7th International Suppliers Fair (IZB), which is showcasing Argentina and Brazil as its partner countries this year.
“We were able to provide Congress participants interested in becoming involved in the South American market with reliable first-hand information on the very latest trends and challenges involved in the South American automotive and automotive supplier industries, as well as the best practice experiences of companies that are already successfully operating in this location”, declared Julius von Ingelheim, the Spokesman of the Board of Wolfsburg AG, which organised the Congress in cooperation with the AutoUni, in his positive summary of the event. “The event also offered participants a wide range of opportunities to establish and improve transatlantic contacts.”
At the start of the Congress, its two patrons Thomas Schmall, the President and CEO of Volkswagen do Brasil, and Emilio Saenz, the CEO of Volkswagen Argentina S.A., provided the approximately 200 participants with a realistic overview of the automotive value creation chains in both South American nations. They also explored the topics of production growth, cost competitiveness and, last but not least, sustainability.
Focusing on Sustainability
Sustainability is also a major focus at the chemicals group Lanxess from the German city of Leverkusen, which recently confirmed plans to invest 30 million Euros in the construction of two factories for the production of plastics and rubber additives in Brazil. In his presentation on “The Future of Mobility – Innovative Products for the Automotive Industry”, Marcelo Lacerda, the CEO of Lanxess Brazil, also reported that the company’s production of EPDM rubber in the Brazilian town of Triunfo now uses bio-based ethylene obtained from sugar cane from the local region: “The increase in environmental and safety standards has led to a huge demand for synthetic high-performance rubbers, which are, for example, used for the production of so-called ‘green tyres’, which are more environmentally friendly. Our production sites in Brazil have enabled us to rapidly respond to this demand on a sustainable basis.”
Increasing the Use of Local Suppliers
The President of the Association of Argentine Autoparts Manufacturers (AFAC), Fabio Rozenblum, looked at the prospects of similar profitable investment opportunities for his home country in his presentation, in which he declared that Argentina is an attractive market for the automotive industry. “Around 70 percent of the vehicle components used in automotive manufacturing in Argentina are currently produced overseas. We have set ourselves the target of significantly increasing the percentage of components manufactured locally", explained Rozenblum. He then went on to state that this target provides the European automotive supplier industry with a wide range of opportunities to enter into the Argentinian market, for example by getting involved in a local commitment or by establishing bilateral partnerships.
“The South American automotive market continues to hold huge potential. In order to maintain our high level of quality, we qualify our global supplier companies in South America in accordance with the Volkswagen standards. This approach has enabled us to procure around one third of the components and services required at our Brazilian factories from cooperations with local suppliers", declared Alexander Seitz, the Vice President of Procurement at Volkswagen do Brasil.
In his closing speech, Julius von Ingelheim encouraged the Congress participants to use the next few days to make the most of the opportunity provided by the 7th International Suppliers Fair to establish contact with over 60 exhibitors from Argentina and Brazil. He brought the event to a close by wishing all guests an interesting time at the IZB and an abundance of valuable discussions.