Brazil Automotive Industry
Special Report
➲ Automec was a great opportunity for buyers and manufacturers to meet
Cardoso brought stability and solidity
to the macro-economic environment
through a set of pragmatic policies,
and this laid the foundation for the next
president Luiz Inácio Lula da Silva to
take the credit for Brazil’s economic
turnaround. “The biggest legacy of
my presidency is not the programmes
that took 30 million Brazilians out of
absolute poverty and created 15 million
jobs. It is the accountability of the
public institutions and real partnership
with business, labour and civil society
that brought hope to the people.
We put the needs of the people first.
Not ours”, Lula said when he visited
South Africa in November 2012, and
it would be lovely for South Africa to
replicate this, but I am afraid that it is
now too late for this, and with president
Zuma we definitely do not have a Lula,
nor a Cardoso.
In today’s global economic
environment, Brazil and South Africa
are saddled together, exposed to
weaker commodity prices and the
diminishing appetite for emerging
market assets, and both countries
having experienced the humiliation of
sovereign credit downgrades. Pravin
Gordhan may complain that these
downgrades are unfair, but there is
no escaping that South Africa and
Brazil have both experienced fiscal
slippage and the constrained ability of
government to adjust policy ahead of
elections (South Africa goes to the polls
in May 2014 and Brazil in October 2014).
With private-sector investment low in
both countries, definitely as a result of
legislation that impedes the ability to do
business, we face the identical problem
of governments’ that are out of touch
with the realities of what is needed
to build a modern economy. As any
businessman will tell you, whether in the
automotive industry or any other industry,
both governments’ should realise that
the key to success is to see business as
a partner that should be encouraged to
progress and grow, and definitely not as
an adversary that has to be restrained
and held back.
The three
challenges and
opportunities
facing South
Africa and Brazil’s
automotive
industries
But, ignoring all of the above, let us focus
on the three biggest challenges facing
Brazil and South Africa’s automotive
industries. Firstly, it is the slow-down
in global trade growth. In fact, the past
two years has seen global trade growth
dipping below gl obal GDP growth.
Remarkably, this is the first time this has
happened since World War II.
➲ Global brands were evident at the show
| words in action
60
may 2014