Marcopolo uses rough roads to enter more remote African markets
BUS MAKER Marcopolo is using Brazil’s rough roads as a calling card to enter markets as remote as Ghana and Cameron as it tries to shield its business from a recession at home.
The company started exporting to 12 new countries in the past year and now ships to 40 markets worldwide, according to Ricardo Portolan, the exports manager. That helped put it on track to boosting export revenue in dollar terms by 50percent last year.
As Brazil muddled through its worst recession in at least a century, Marcopolo refocused its efforts on offshore markets to compensate for the sharp drop in domestic sales.
Bus sales tumbled 29 percent to 12 000 units last year, according to data recently released by the National Vehicle Manufacturers Association, known as Anfavea. The figure sets the market back a decade and compares with a peak of 35 000 in 2011, when Brazil’s economy was booming.
“Exports were a positive surprise for Marcopolo,’’ said Credit Suisse analyst, Felipe Vinagre, in an interview. “The company proved it has an international product.”
Still, analysts remained negative on the stock, which had one of the worst consensus ratings among Brazil small caps, according to Bloomberg data. Among analysts who rated the stock, there were six hold recommendations and nine sells – including one from Vinagre, who keeps a negative view because of uncertainty about Brazil’s recovery.
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‘Exports were a positive surprise for us – the company proved it has an international product.’
Temer’s ability to revive growth and have trimmed forecasts for a much-awaited rebound. Activity is expected to grow 0.8 percent this year, after tumbling about 3.5percent last year, and 3.8percent in the previous year.
Marcopolo was cautious about the economy and expected the domestic market to start recovering in the second half of this year, said Portolan. Anfavea saw a 12percent rise in sales to 13400 buses for this year as new mayors started renovating municipal fleets.
Marcopolo buses, which are designed with structural reinforcement such as extra-resistant suspension systems to cope with Brazil’s rutted and often unpaved roads, are well suited for markets facing similar challenges related to a lack of infrastructure.
The buses’ features coupled with the Brazilian currency’s devaluation this decade helped the company become more competitive abroad, Credit Suisse’s Vinagre said.
“It could be harder for it to sell in the European market, which requires higher sophistication, but in markets similar to Brazil it has good cost and quality,” he said.
Marcopolo started trading in Cameroon last month and was betting it would grow in the long term.
Technicians check a Paradiso bus made with a Daimler-Mercedes chassis. Marcopolo is refocusing its efforts on offshore markets to compensate for the sharp drop in domestic sales.