- Demand for trucks expected to drop as much as 50% this year
- Commercial vehicle unit to keep investing despite downturn
Daimler AG said it expects demand for trucks and buses in Brazil to plunge as much as 50 percent this year as the crisis in South America’s largest economy gets worse.
The market in Brazil, struggling to overcome a crippling recession, will need one to three years to return to growth, Wolfgang Bernhard, head of Daimler’s commercial-vehicle unit, said at the Hamburg club of business journalists late Thursday.
“We expect to continue hibernating,” Bernhard said. Industrywide truck sales plunged 44 percent in the first half of the year, the Stuttgart, Germany-based company said in August. Brazil is one of several markets in which “there’s a strong, very cold headwind,” he said.
Brazilian bond and equity markets tumbled on Thursday after Standard & Poor’s cut the country’s credit rating to junk with a negative outlook. Daimler has already shrunk its Brazilian workforce by about 3,000 jobs under a two-year reorganization and in August announced reduced working hours at its local truck-making division.
The company will invest in new products in Brazil despite the downturn because it sees long-term potential in the country, Bernhard said. Daimler has been able to restore market share despite the crisis, becoming the country’s biggest seller of trucks again, he said.
“This may not be a sign of spring, but it shows that our team managed to cope with that difficult environment,” Bernhard said.
The company operates two truck- and bus-building plants in Brazil and is setting up a factory to start making passenger cars there next year. It employed about 12,000 people in the Latin American country at the end of 2014.