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Iveco Will Make Billion-Dollar Investment in Latin America Over the Next Years
Iveco, the fifth largest manufacturer of trucks and buses in Brazil, with a vehicle factory based in Sete Lagoas, in the state of Minas Gerais, announced last week that it aims to invest R$ 1 billion in Latin America by 2025. In the 25 years that Iveco has operated in the country, this is the largest investment plan ever made by the company.
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More than half of this amount will be spent on developing new products, including gas-powered vehicles, which are expected to start production by the end of 2022 or early 2023. A significant portion of this investment will also be used to nationalize components, aiming to avoid currency fluctuations, as explained by Márcio Querichelli, president of the company in Latin America.
In Brazil, nearly 7% of the truck market is held by Iveco, and the manufacturer aims to reach a 10% share in the country.
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To strengthen Iveco in the Latin American region, part of the funds allocated for investments will be applied to the factory in Argentina and to the sales operations in other countries in the region.
Currently, Iveco has 2,500 employees, with one thousand of them hired last year. Additionally, the company is one of the few to operate three shifts in various sectors of the factory in Sete Lagoas. According to the president of Iveco, the company has been working close to its capacity limit and is evaluating alternatives to increase it, as the market will continue to grow.
In 2021, Iveco reported a 120% increase in production compared to 2020, with a total of 22,000 vehicles produced in Brazil and Argentina. For 2022, the expectation is that this number will reach 30% according to Querichelli, but it will depend on the availability of electronic components, which are scarce in the market.
Investment in Gas Vehicles
The first gas-powered vehicle to be produced in Brazil is a truck, in the heavy-duty sector. The investment in this type of vehicle is due to the increase in sales driven by the strength of the agribusiness, construction, and e-commerce segments in the country.
“We already have a complete portfolio in Europe and will bring the project here and make the necessary adaptations”, Querichelli said. Additionally, gas buses are also targets for Iveco in the country.
The president also stated that electric vehicles are also targets for Iveco, but they are to be imported. Initially, the importation of the Daily van is planned, but the date of arrival of these vehicles in Brazil has yet to be defined.
Iveco is investing in changes to its product portfolio and has previously reported an increase of nearly 70% in truck sales, in a market that grew by 43.5%. In the bus sector, which only registered a 0.9% improvement compared to 2020, the performance at Iveco increased by 69%.
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