You could say it was in stoppage time at a football World Cup final. Or, on the last lap of a decisive Formula 1 grand prix. The fact is that, regardless of the comparison, Volkswagen Caminhões e Ônibus (VWCO) had a lot to celebrate in 2021. For a difference of only 302 units in the year , the automaker dethroned rival Mercedes from the top of the Brazilian truck market, a position it has held since 2016. More than that, the company saw the volume of exports grow by 80%, one of the options adopted by various segments of the national industry to ensure better exchange balance in the face of the devaluation of the real and, thus, balance the accounts. “2021 was really a year of challenges, but it also served to crown achievements and historic milestones, such as the 40th anniversary of the brand, the 25th anniversary of the factory in Resende (RJ), in addition to the launch of the first electric truck,” he told DINHEIRO. Roberto Cortes, president and CEO of VWCO. “And, mainly, because we have equated so many variables that the period imposed on us, such as Covid-19, the lack of parts and this political and economic environment.”
The executive’s excitement is justified. After a fierce dispute during the season, Volkswagen rose to the top at the end of the lights, in December, by selling 452 more copies than Mercedes (3,469 to 3,017). If you take into account the total numbers for 2021, Volkswagen reached 37,460 units, a growth of 46.4% over the previous year, with a 29.4% market share. Already the rival scored 37,158, with market share of 29.2%. Total vehicle sales in the country reached 127,357, up 42.8% from the 89,173 sold in 2020, driven mainly by the agribusiness and mining sectors. The data are from the National Federation of Automotive Vehicle Distribution (Fenabrave).
The fight in 2022 promises to remain exciting. VWCO sold 2,345 units in January, against the competitor’s 2,309, up 15% in the market compared to the same period last year. But unlike what happened in recent years, the executive avoids making specific projections, despite 42 years of activity in the sector and 53 years of hard work. The reason? “There are so many variables”, said Cortes, when initially citing the items that can generate the growth of the industry: the substantial improvement in the fight against the pandemic; the growth of the economy, mainly from agribusiness; the rise in civil construction and exports; the increase in infrastructure; new ways of selling (rental and leasing); and the need for fleet renewal. “The negative side is the increase in interest rates, which affects the propensity to invest of those who buy trucks; the issue of lack of semiconductors and parts; a possible rebound of Covid-19; and external factors. I wouldn’t peg any growth numbers given these uncertainties.”
Volkswagen’s upward momentum in the domestic market was also reflected in the international scenario. With the resumption of business in several countries even during the pandemic, the company bet on the diversification of the portfolio and the expansion of destinations to leverage sales of trucks and buses, which increased from 4,680 units in 2020 to 8,400 last year. The growth is part of a brand’s internationalization strategy established in three steps: focus on countries where it already operates, but where it is not as strong as in Brazil, such as Argentina, Chile and Mexico; entry into new markets, such as regions in North Africa (Morocco) and the Middle East; and bets on the Asian market, initially in the Philippines.
To reach a balance between sales and profitability, the company has been working to reduce costs and increase efficiency. A speech adopted in recent months by several presidents of companies in the country, regardless of the segment in which they operate. The increase in costs from last year and 2020 – whether due to the devaluation that makes imported products more expensive, or due to the high prices of tires and steel, for example – threatened profitability and the company passed it on to prices. “We are doing this as much as possible and we intend to continue in 2022 as a corporate policy,” Cortes said.
The growth performance goes through the bus segment, in which it follows in second place, still far from the leader Mercedes. VWCO sold 3,697 units last year, with a 20.8% share of the domestic market. The rival sold 8,878 copies, with 49.9%. The executive’s expectation is that the segment will grow as vaccination advances across the country. Faced with the risks of contamination and social isolation measures, collective transport has shown a drop in users since the beginning of the pandemic, in 2020. Last year, grew by only 1%. Volkswagen’s strategy to gain market share is to seek new customers and retain others, a plan adopted in the truck segment. “The idea is to have a continuous growth in participation. Not aiming for jumps. Little by little.”
The increase in participation in the export of buses and trucks involves investments. Volkswagen is in the midst of a cycle of R$ 2 billion that will be contributed until 2025. Part of this amount will be used to expand the business involving the e-Delivery, the first electric truck developed in Brazil to enter the series production line. The vehicle was launched in mid-2021 and the 200 units produced were sold in the Brazilian market. The idea now is to test it in other countries. With a portfolio that ranges from the 3.5-ton Delivery Express to the 73-ton Meteor, the automaker has allocated resources to keep its products up-to-date in technology, whether regulatory (emission laws) or safety and continuous improvement. Another part of the investment goes towards the trend towards digitization, connectivity and services. “And the third is an internationalization plan that requires not only adapting products to these various markets, but also structuring commercial operations [nesses mercados]which also requires investment.”
Executive Luiz Carlos Moraes, president of the Association of Motor Vehicle Manufacturers (Anfavea), approves the dispute for leadership of the truck market, for offering alternatives to operators. The advancement of technology, with the emergence of electric models, in addition to autonomous vehicle for applications such as mining, is highlighted. Agribusiness and infrastructure are also pointed out by him as important drivers of the segment. “There are infrastructure contracts that were signed back then, whose impact will start now. And 2023 will be better”, said Moraes. “I see a good year. Challenging still, because of the interest rate and all those things that affect it.” The entity estimates the sale of 140 thousand units, more than half of superheavy and extraheavy. It is in this game that VW has dived.
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