This past fall, a delegation of eleven Swedish sub-suppliers visited Brazil to explore the future potential of the automotive market. The companies are part of the Go Global project run by FKG, a trade association representing Scandinavian suppliers to the automotive industry. The objective of the project is to help its members expand internationally. This year's trip focused on the "commercial vehicle" segment, with seminars and company tours arranged at Scania, Volvo, Mercedes Benz, MAN and FIAT. "These visits to automakers are intended as an initial door opener for the suppliers," says Svenåke Berglie, CEO of FKG. "But the visits in Brazil also give the participants an excellent glimpse into the South American automotive industry,"

Win-win situation
The company visits gave participants the chance to make important contacts while simultaneously getting first-hand information about their needs. "We would very much like to see more Swedish suppliers set up here in Brazil," says Erodes Berbetz, Purchasing Director at Volvo Powertrain Components in Brazil. "We know that they have the expertise to meet our needs. It's a win-win situation that will greatly benefit both us and the suppliers."

 
Local presence essential
One clear message came through from the automakers: Local presence is a prerequisite for supplying to OEMs. Aside from the logistical benefits, the Brazilian government will only provide subsidies to companies with a local presence. At least 60 percent of the vehicle contents must be produced locally. "We've seen a big increase in foreign companies wishing to establish here in Brazil," says Svante Hjort, CEO of SouthPartner, one of the arrangers of Go Global Brazil 2010. "One of the reasons for this is the rapidly expanding middle class here. Another twenty million Brazilians will enter the middle class over the next ten years, and this will increase demand for vehicles and vehicle components."