Construction machinery sales in Brazil this year will reach 15,800 units, a 37.8% decrease compared to the 25,389 units sold in 2014, according to the Association of Equipment Manufacturers. However, the downturn has not deterred global suppliers from building a presence in the Latin American country, where import taxes are high and much infrastructure build-out is still needed.
"We will not turn back," said Richard Klemens Stroebele, Liebherr's chief in Brazil, at the triennial M&T Expo, held last month in Sao Paulo for 40,000 visitors, a 16.7% drop in attendance since 2012. Liebherr has been in Brazil for more than 40 years and plans to expand mobile cranes and its factory in Guaratingueta.
Brazil's construction sector still has room to grow, suppliers noted. In 2005, the machines sold totaled only 5,612 units, according to AEM. "It is not the first adjustment and will not be the last," said Afranio Chueire, president of Volvo's Latin American unit.
"This market has pent-up demand for infrastructure," Chueire added. Reus Rosa, director general of Bomag Marini for Latin America, recalled that only about 10% of Brazil's road network is paved. An increase in highway concessions could accelerate infrastructure investment, he noted.
Roberto Marques, country manager of Deere in Brazil, said he plans to open 10 distribution centers in the country over the next two years; the network already has five dealers and 25 stores. Deere opened a plant in the country last year and now offers 11 Brazil-made machines, including loaders, backhoes and excavators. It also is assembling three motor-grader models from imported parts.
Xu Ming, president in Brazil for China-owned Sany Group, reaffirmed that the country remains a strategic market. With Sany's participation in Brazil for mobile cranes of up to 100-tonne capacities, the executive said the company plans to expand its excavator line there, despite high competitiveness in that segment.
For Andrea Park, president of the road-machinery division of the Brazilian Association of Machinery and Equipment (ABIMAQ), the long-term outlook in Brazil is positive. "This year is for preparing for the recovery," she said.
This year's expo also pointed to a maturing market, Park added. "The market has changed a lot in Brazil. Today, machine solutions appropriate to the type of service required are sold." Companies that focus on servicing contractors more than just machine sales will build a solid foundation.
"Our goal today is to support the customer in their operation," explained Nicola D'Arpino, vice president of New Holland Construction for Latin America: "We want to help them, to retain them. They will build the future."
