Brazil: with a drop in sales, 3 automakers suspend production 

At least three major automakers – General Motors, Hyundai, and Stellantis (owner of  Fiat, Jeep, Peugeot, and Citroen brands) – will suspend production lines and give collective vacation to employees from Monday, 20.

The reason is the drop in sales recorded this year and the prospect of a slowdown until next year.

Analysts from Bradesco’s Economic Research and Studies Department project a slowdown in the automotive sector until 2024, according to a study published by the newspaper O Estado de S. Paulo.

The suspension of production affects factories of some vehicles and will last at least two weeks.

This Monday, Hyundai grants a collective vacation of three weeks for employees of the unit’s three shifts that produce the models HB20 and Creta in Piracicaba (SP).

On Wednesday (22), Stellantis will halt all production of the SUVs Renegade, Compass, Commander, and the pickup truck, Fiat Toro, at the Goiana (PE) plant.

Workers will have a collective vacation.

In late February, the plant that produces models of the French brands Peugeot and Citroën, also part of the Stellantis group, closed its second shift in Porto Real (RJ) and anticipated the dismissal of 140 employees on temporary contracts.

Finally, General Motors will suspend production of the S10 pickup truck and the Trailblazer SUV at the São José dos Campos (SP) plant from March 27 to April 13.

In 2019, vehicle sales in Brazil were 2.8 million units. Last year, that number fell to 2.1 million units, or 24.5% less.

Given this scenario, the shutdowns occurring in factories aim to reduce production to avoid a significant accumulation of inventories, which would put downward pressure on car prices.

Another problem in the industry, which has forced production stoppages since 2019, is the shortage of components, such as semiconductors and chips.

About 630,000 stopped being manufactured in the period due to the shortage of these products.

Due to the lack of components, Volkswagen will suspend all production at the Taubaté (SP) plant for ten days starting March 27.

Between the end of February and the beginning of this month, the brand had already paralyzed the lines of the other three units in the country, alleging a lack of components.

The industry forecasts that a good part of the more than 600,000 cars that stopped being produced in the last two years due to a lack of parts will be sold this year.

But “this should not occur given the loss of purchasing power of the consumer, inflation and high-interest rates, restriction of banks in releasing credit because of default and lack of definition of economic policies by the new government,” according to the newspaper Estadao Fernando Trujillo, consultant at S&P Global Brazil.

With information from Revista Oeste