International still wants to build trucks in Brazil

[kscarbel2]

Automotive Business  /  June 17, 2016

Navistar insists that it is not giving up on assembling International trucks in Brazil.

Despite having completely stopped the production of trucks at its Canoas plant since October last year, the truckmaker proved that it still wants to assemble trucks, at least until May 2017, by renewing its manufacturer's license in the Inovar-Auto (innovate-auto) incentive program, after being a year out of the program. Navistar’s renewal application was approved by the Ministry of Industry through Ordinance 129 published on May 31.

"We continue with the intention of resuming production as soon as the market improves. We interrupted the line to adjust inventories that grew due to the sharp drop in sales. If there is demand, we can quickly put the plant into gear again," says Navistar South America head José Eduardo Luzzi.

“The renewal of our qualification in the Inovar-Auto program shows our determination to continue local assembly, "he said.

With an annual production capacity of up to 5,000 trucks, Navistar’s assembly plant in Canoas was inaugurated in June 2013.

Prior to that, International’s two locally produced models, the medium-duty DuraStar and 9800i heavy tractor, were assembled in facility rented from truck and farm tractor producer Agrale in Caxias do Sul.

During its first year of operation, production was largely sustained as a result of the truckmaker winning large government tender for almost 900 Durastar trucks for the Ministry of Agrarian Development (MDA).

During 2014 and 2015, the truckmaker’s Brazilian sales collapsed from 954 to 67 units, making it impossible to continue production.

After stopping Canoas production last year, Navistar continued sales through three dealerships and factory-direct sales, making use of unsold inventory.

During the January thru May period of this year, 25 new Navistar trucks were registered by customers.

This month, Navistar began a new TV-focused advertising campaign in Rio Grande do Sul, where the brand has a strong reputation with customers.
After stopping the truck assembly line at Canoas, Navistar relocated the facilities other functions.

The parts distribution center was transferred in November to the Santo Amaro plant in São Paulo.

And the MWM engine production contract for the Chevrolet S10 pickup ended last March.

Thus, almost all employees were laid off. There is still a team of employees to support plant maintenance and maintain unsold truck inventory.

Navistar entertained the idea of leasing the plant to a Chinese truckmaker, or producing their trucks under contract, but most of the Chinese truckmakers including Foton, Sinotruk, JAC and Shacman all backed out with the collapse of Brazil’s economy. Foton finally decided to lease the very same Agrale facility that Navistar had rented for over a decade.

 

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[DailyDiesel]

Wow, talk about photoshoped images!

[kscarbel2]

Factory views..........

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[kscarbel2]

In March 1999, Navistar acquired a 50% stake in Brazilian diesel engine maker Loschpe-Maxion S.A..*, creating the Maxion International Motores S.A. joint venture.

The Maxion-Navistar joint-venture immediately launched construction of the new Canoas engine plant at a cost of $25 million, which would produce 7.3 liter Powerstroke engines for South American, North American and other global markets.

In early 2001, Navistar bought out Maxion’s stake in the joint venture, and renamed the operation International Engines South America (ISEA).

In May 2005, International Engines South America purchased MWM, creating MWM International Industria da Motores da America do Sul Ltda.

In summary, the Canoas plant was constructed as an engine plant. Note the low roof. If originally for truck assembly, the roof would be two to three times higher.

The video shows engine production at Canoas, but as mentioned above, that activity was just relocated to Sao Paulo on the coast.

* ArvinMeritor sold its wheel business to Loschpe-Maxion in 2009 for US$180 million. Today, Loschpe-Maxion is the world’s largest wheel maker for trucks, buses and agricultural machinery. It also produces automotive components, and complete vehicle chassis, frame rails, and cross-members for commercial trucks and buses)