Inspired by market, auto industry inaugurates innovations in Brazil

Jan. 1, 2020
Brazil’s government has enacted regulations, incentives and tax policies designed to reduce vehicle imports and increase domestic production while pushing for cars that emit fewer pollutants.

With a rising middle class driving an accelerated pace of automotive demand, Brazil’s government has enacted a series of regulations, incentives and tax policies designed to put the brakes on vehicle imports and increase domestic production while pushing for cars that emit fewer pollutants.

“The new automotive regime will promote green technology, help Brazilian consumers by significantly improving the fuel efficiency of light vehicles and, in the process, make Brazilian vehicles technically competitive with those in Europe, the U.S. and Asia,” says Paulo Cardamone, managing director of IHS Automotive’s Brazilian operations.

Known as INOVAR-AUTO, the nation’s “Incentive of Technological Innovation of the Production Line of Automotive Vehicles” program will steer development of key systems such as direct injection, turbo- and super-charging, stop/start, advanced multi-speed transmissions, rolling resistant tires, light-weighting and other related technologies.

“These innovations will lead to a rapid improvement in the automotive industry and, more importantly, the lives of every day Brazilians – whether they drive a car or not – as this will be a huge contributor to reduced pollution levels in Brazil,” notes Paul Haelterman, vice president of IHS Automotive Consulting.

According to forecasting from Roland Berger Strategy Consultants, by 2015 Brazil could overtake Japan to become the world’s third-largest car market after China and the U.S., reaching 6.6 million vehicles by 2020. Growth of 8 percent per year in commercial vehicles between now and 2018 is also possible.

Citing the impact of INOVAR-AUTO, BorgWarner reports that it is “ideally positioned to support car manufacturers in complying with the new regulations” with a new production facility and engineering center. The company expects to benefit from the sharp rise in production in Brazil and strengthen its local market position as a leading supplier of environmentally friendly technologies, such as gasoline and diesel turbochargers, dual-clutch transmission technology, engine timing systems and emissions products for cars and commercial vehicles.

“The increasing demand for our fuel-efficient powertrain solutions is driving significant growth for our business in Brazil,” says BorgWarner President and CEO James R. Verrier. “The new Brazilian regulations coincide with BorgWarner’s global growth strategy – engineering advanced technologies to improve fuel economy, reduce emissions and enhance performance,” he adds. “With our new facilities and nearly 40 years of market experience in Brazil, BorgWarner is well-positioned to adapt production and introduce new technologies to serve our customers’ needs quickly and efficiently.”

Having entered Brazil in 1975 with a facility in Campinas, Verrier says the company has established a market-leading position in turbocharger, fan and fan drive production, with plans for introducing variable camshaft timing (VCT) technology and engine timing systems.

The new 204,500-square-foot plant and engineering center in Itatiba City, which is twice as large as the former Campinas location, opened in April after taking just 18 months to build. It is expected to soon receive LEED (Leadership in Energy and Environmental Design) certification, and the campus boasts four engine testing stands for developing and introducing additional innovations.

“We are laying the foundation for expanding our excellent position as a leading supplier of advanced powertrain technologies in the rapidly growing South American market,” says Verrier. “New legislation is driving automakers to improve fuel economy and reduce emissions,” he explains. “Consumers are demanding performance and enhanced drivability. BorgWarner’s advanced technologies satisfy all of these needs with local production and engineering capabilities.”

Unveiling EVs

In June the Renault-Nissan Alliance reached an agreement with the Rio de Janeiro state government and other public-private partners aimed at paving the way for electric vehicles. As the Alliance gears up with a selection of EVs, the other participants are preparing a suitable charging, maintenance and economic infrastructure to support the initiative.

“We want to make sure Rio de Janeiro will be a world’s reference in energy for the 21st Century, repeating the vocation that Rio already has in the area of traditional energy,” says Julio Bueno, secretary of the State Department of Economic Development, Energy, Industry and Services.

Rio Negócios, Rio de Janeiro’s official investment agency, is representing the municipality to promote the city as a business destination for its emerging technological and industrial sectors. “In terms of investments for the EV technology, Rio will be at the forefront of industrial innovation,” says agency President Marcelo Haddad.

A roadshow conducted in the spring brought Rio Negócios officials to the U.S., where they held 40 meetings and presented six major events in San Francisco, New York City and Houston. The sessions focused on market-driven technological, energy and financial opportunities.

Rio de Janeiro and São Paulo are currently rolling out pilot programs that use Nissan’s Leaf as part of the cities’ taxi fleets. Renault recently launched its ZOE subcompact and has a range of other zero-emission options, including the Fluence Z.E. sedan, the Twizy urban two-seater and the Kangoo Z.E. van.

“Renault-Nissan is in the vanguard of electric vehicles,” says Carlos Ghosn, the Alliance’s CEO. “This new initiative reaffirms our global commitment to offering sustainable urban mobility that is fun to drive.”

Boosting market share

Executives at Renault and Nissan say both companies have dramatically increased their visibility and manufacturing operations in Brazil, the seventh largest economy in the world.

In March, Renault inaugurated a major expansion of its Curitiba plant, increasing annual production capacity from 280,000 to 380,000 vehicles. Brazil is now Renault’s second-largest market after France, with 241,594 cars sold in 2012 and a market share of 6.6 percent.

Nissan is constructing a new $1.5-billion manufacturing plant in Rio de Janeiro that is slated to begin production in 2014, and the automaker is intent on strengthening its presence in Brazil to reach a 5 percent market share by 2016.

Expected to create nearly 4,000 direct and indirect jobs, the factory will have the capacity to annually produce 200,000 vehicles for sale in Brazil.

At this past November’s São Paulo Motor Show, the largest in South America, Nissan unveiled two new models for the Brazilian market along with a Brazil-specific concept car. Its Frontier 10 Years is a special edition truck celebrating the first decade of Nissan’s production in Brazil, while the March Rio 2016 vehicle salutes the automaker’s sponsorship of the upcoming Olympic and Paralympic Games.

Nissan’s Extrem concept was designed specifically for the Brazilian market; it involved “elevating the profile” with two doors and enough room for four people with storage space.

“It was just a fantastic opportunity to put something together that we feel really embodies the vitality, the energy and the great personality of the Brazilian culture,” says design manager Robert Bauer. “The color that we chose (for the Extrem), we call it solar cortex; it’s inspired by the brilliant sunrise and sunsets that we saw while we were visiting Rio,” he explains. “We wanted it to look not only exciting, but modern and contemporary.”

Nissan plans to introduce a total of eight new models into Brazil by 2016. “We are expecting big growth,” says Chief Creative Officer Shiro Nakamura. “We are very much inspired by the market.”

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