Antonio Roberto Cortes, president and CEO of MAN Latin America.

Due to a more urbanized, growing middle class and consumer appetite

Brazil, the world's fifth largest country, will have to do something about its incredible traffic growth and the burden it places on the transport infrastructure, if it wants to capitalize on its growing trade opportunities.

The country has more than 1.5 million kilometers of roads, but only 212,618 km of them paved. Meanwhile, 60 percent of its trade goes via this vast road network and 95 percent of its people rely on it to get around, while the economy is growing at a rapid pace.

Also, its increasingly wealthy and urbanized population is buying more motor vehicles for leisure and business purposes. Obviously, this poses a challenge, similar in fact to the one China has faced.

In 2010, Brazil sold a national record of 5,444,387 vehicles, and over the next eight years estimates show that a million additional trucks will go into use on the country's roads.

It is these figures that are prompting truck companies, private owners, and business leaders to clamor for more spending on the nation's transport system.

According to one recent survey, Brazil will need as much as $110 billion to improve its roads and highways, with 80 percent of that needed for repairs, upgrading, and widening of roads.

The remainder is needed for building new roads and paving stretches of federal highways.

Meanwhile, the tonnage of transported goods is expected to rise, with an accompanying increase in the movement of laborers, and the country has seen that the investment has to come immediately.

The responsibility for maintaining and restoring these highways, waterways and railways, falls on the shoulders of the transport infrastructure department (DNIT), which has a budget of approximately $10 billion for projects in 2011.

Obviously, more investment will be needed in 2012 to deal with economic growth pressures, coupled with two biggest sporting events -- the FIFA World Cup, in 2014, and the Olympic Games in 2016.

Road freight is not the only movement of goods that has been showing record growth. Thanks to the increase in regional and international trade all across the country, air-freight is expected to grow six percent this year, and rail freight by 11 percent.

These two modes of transport pose their own problems that investors are eager to address, even though the most pressing issue is the condition of the country's roads. Capital is becoming more readily available and the country has more than $275 billion worth of international reserves, so, investment in the network should come quickly.

Nonetheless, Antonio Roberto Cortes, president and CEO of MAN Latin America, thinks the investment cannot come soon enough. His company has 144 dealerships across the country and handles 98 percent of Volkswagen truck and bus after-sales needs and building a better road network could bring considerable returns.

MAN Latin America is also the number one truck maker in the country with almost 31 percent of all truck sales and 36 percent of bus sales. In a country where the people rely heavily on public transport, this is a good sign. MAN Latin America is Brazil's second bus producer.

As investment nationwide takes off, more trucks will be needed to move construction materials and equipment. With the addition and improvement of roads, more buses will be needed and MAN Latin America says that it is ready for the challenge.

Cortes commented, "There are many opportunities from infrastructure construction. There are major projects to build power plants, hydroelectric plants, and with the World Cup and Olympics on the horizon, the momentum will build. There are more than 10,000 construction projects going on and this is great news for MAN Latin America."

With the new infrastructure projects in the works and the MAN Latin America-Volkswagen Truck & Bus cooperation, everything seems to be coming together at just the right moment for Cortes and his team.

"Starting next year we'll be selling MAN brands here in Brazil and adding even more value to the brand."

China Daily

(China Daily 09/13/2011 page29)