Marcopolo may open unit in China to combat rise of Brazil’s currency

16 February 2006

Sao Paulo, Brazil, 16 Feb – Brazilian company Marcopolo, one of the world’s largest manufacturers of bus bodywork, has restarted its studies for opening a unit in China after the recent increase in value of Brazil’s currency, company officials said Wednesday.

The 23 percent increase of the Brazilian real against the US dollar since 2004 has affected the group’s exports.

Increasing production abroad and opening a unit in China could help Marcopolo overcome its profitability difficulties in Brazil, Brazilian newspaper valor Económico reported.

In China Marcopolo is assessing the best alternative for when its current agreement for technology transfer with Italy’s Iveco comes to an end later this year.

The Brazilian group is also negotiating a joint venture with Tata Motors, India’s largest holding company, made up of 91 companies in several sectors, which is present in over 40 countries and has annual turnover of around 14.2 billion euros.

The aim of the partnership would be to supply bus bodywork for the African and Asian markets, as well as supplying luxury Marcopolo units to India.

Marcopolo’s Investor Relations manager, Carlos Zignani, quoted by the newspaper, said his company was focused on a continuous search for ways to reduce production costs.

Despite the increase in value of the real, Marcopolo forecasts a 6.4 percent increase in turnover in 2006 to 840 million euros.

Marcopolo is currently Latin America’s largest manufacturer of bodywork and one of three largest in the world, and has factories in Brazil, Portugal, South Africa, Mexico and Colombia.

The company’s unit in Coimbra, Portugal has an annual production capacity of 230 units.

Marcopolo’s Portuguese production is exported to European countries, namely Spain, Greece, France, the United Kingdom and the Netherlands. (macauhub)