SAO PAULO, July 6, 2015 /PRNewswire/ -- The impressive
growth of the Brazilian off-highway vehicle (OHV) market over the
last six to eight years is expected to last well into 2021, despite
some headwind in the near term, majorly caused by the country's
economic condition and the lack of financing. Investments in
infrastructure and the mega farm trend are expected to prove highly
advantageous, boosting the volumes of OHVs in the agriculture
equipment sector.
Photo - http://photos.prnewswire.com/prnh/20150706/230803
New analysis from Frost & Sullivan, Strategic Analysis of
the Brazilian Off-highway Vehicles Market
(https://www.frost.com/ned8), finds that the Brazilian OHV market
is expected to grow to over 170,000 units by 2021. The demand is
expected to stabilize toward mid-2016, and soar thereafter toward
2021.
For more information on this study, please email Francesca Valente, Corporate Communications, at
francesca.valente@frost.com.
The agriculture equipment sector is forecast to account for
almost 60 percent of the total OHV volumes by 2021, followed by
earthmoving equipment, with nearly 30 percent. In terms of
equipment types, wheel tractors, backhoes and aerial platforms are
anticipated to comprise more than 60 percent of the total market by
2021, cumulatively surpassing 107,000 units.
These high numbers have been made possible by the establishment
of at least seven manufacturing facilities in Brazil in the last four years. The new
facilities position the country as a manufacturing hub for the
entire Latin American region, and allow market participants to
achieve economies of scale as well as competitive pricing and
positioning.
"High import taxes, the government's push to strengthen domestic
knowledge, and qualification requirements for financial support are
prompting the establishment of production facilities in
Brazil," said Frost &
Sullivan Automotive & Transportation Program Manager Yeswant
Abhimanyu.
While the government's multi-pronged initiatives have fostered
the growth of the OHV market in the past, the delays in
infrastructure projects, investments, and concession auctions have
reined in the growth rates to some extent. Furthermore,
fluctuations in commodity prices, unstable economic conditions, and
discontinuation of stimulus policies could also compel OEMs to
re-strategize.
As one of the world's largest exporter of farm products,
Brazil's agriculture sector is
heavily dependent on foreign exchange as well as commodity and
export pricing. A drop in commodity prices may translate to lesser
spending on new equipment. This, coupled with high interest rates,
can create a harsh economic environment for investors.
Participants can offset some of the market challenges by
focusing on the popular segments of compact equipment and equipment
rental. Compact equipment such as mini excavators and skid steers
are expected to touch 7,000 units annually by 2021. Similarly, the
equipment rental market will also take off due to the flexibility
and simplicity of financing, operation and maintenance.
The market will gain additional impetus from the implementation
of emission regulations. For instance, the PROCONVE MAR-I for
construction and agriculture equipment can propel the market
towards cleaner, more efficient technologies that reduce emissions.
A move towards precision farming and productivity mapping will also
give a leg up to telemetry solutions.
"The most successful equipment suppliers are likely to be those
with expanding modular toolkits tailored to the needs of the
Brazilian market," noted Abhimanyu. "They will facilitate cost
optimization, quicker time-to-market, and global quality standards
and technology content."
Strategic Analysis of the Brazilian Off-highway Vehicles
Market is part of the Automotive & Transportation
(http://www.automotive.frost.com) Growth Partnership Service
program. This study focuses on construction and mining equipment
(essential earthmoving, compaction, and material handling
equipment) and agriculture equipment. It provides participant
profiles, the competitive landscape, market metrics, and technology
trends with a special focus on OHV telematics.
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Strategic Analysis of the Brazilian
Off-highway Vehicles Market
NED8-18
Contact:
Francesca Valente
Corporate Communications – Latin
America
P: +54 11 4777 5300
F: +54 11 4777 5300
E: francesca.valente@frost.com
http://www.frost.com
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SOURCE Frost & Sullivan