31 “We don’t want to create an unreal climate of optimism, but logic leads us to believe that as of the second half of 2017, with the economic measures being put in place, a more favorable environment for growth - still very slow, but sustainable - should arise,” he says. Although he is betting that Brazil will end the year with some growth, Martins prefers not to forecast figures or percentages for production or demand. The situation in Brazil is still one of transformation that does not allow any guesswork, he says. In support to this potential are consistent growth in foreign trade, exports of transport equipment up by 10% and the outdated fleet of cargo and passenger vehicles in the country which Martins says need replacing urgently. “A country like Brazil, with a harvest of 220 million tons of grain and which moves more than 60 million passengers a day on public transport in various modes, needs modern transportation equipment. If not, you lose mobility and the consequences will be extremely serious and irreparable,” he observes. The bumper harvest is seen by José Hélio Fernandes, president of NTC&Logística, for now, as the best news for the Brazilian transport sector in 2017.”Agribusiness will still be the backbone of our economy,” says the executive, excited by news of a good winter harvest, as well. Fernandes has no doubt that Brazilian transport will suffer less as the year goes on. He says hat 2015 and 2016 were two of the worst years ever experienced in the industry. “GDP growth of 0.5%, as projected by the government, which is far from ideal, but it shows some recovery, albeit incipient. And increased economic activity means increased cargo,” he says. Falling inflation and interest rates are identified by Fernandes as two other factors that will help growth, alongside reforms and continued healthy levels of exports, even though the recent appreciation of the Brazilian real (R$) does not help and looks to remain until the end of the year. “Brazil can produce whatever amount of soybeans it wants to and there will always be buyers,” he says. Major projects will help The anticipated awards of major concession should not have an economic impact before 2018, according to Fernandes, who laments the serious infrastructure problems in Brazil. “Suffice to see the state of Highway BR163 and the number of trucks stuck on it. But even if some of these major projects begin, there is a lot of red tape and obstacles that will delay the economic effects until next year,” he says. An increased tax burden is another challenge to a more vigorous economic recovery, says Fernandes. “It makes no sense to raise taxes at the exact moment that the country, which already has one of the highest tax burdens in the world, needs to get the economy going.” Alaric Assumpção Júnior, president of the National Federation of Motor Vehicle Distributors (FENABRAVE), also believes that 2016 may have been one of the hardest years for automotive distribution, with the worsening of political and economic crisis and low investor and consumer confidence. “2017 should be better, although the signs of recovery are disappointing, with more hope only in the second half. The important thing is that the indicators are favorable,” says Assumpção, citing economic growth of 1%, inflation within the target and sliding interest rates. “The base rate is expected to reach single digits by the end of the year,” he says. Unemployment will be the last indicator to improve, while household debt and default are expected to improve faster. Industrial output should then improve. “Gradually, vehicle production and sales will improve. More significant growth will only come in 2018,” he adds. For the cargo vehicle market, in particular, Assumpção warns that a lot of logistics companies’s yards are full of underused units or those which were acquired two or three years ago, financed by the BNDES. The truck market’s return to reasonable sales levels will require more significant GDP growth, to improve the demand for transport. The agricultural sector, which accounts for 24% of GDP, is central to this. Assumpção says the transport sector will have a slightly better year in 2017, with truck sales growing by around 2.8%, bus sales up by 4.4% and highway implements up by 7%, slightly below the forecasts made by Alcides Braga, president of the ANFIR.
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