Auto parts sector sees growth in OEM sales and Chinese brand contracts

The Brazilian auto parts sector is experiencing shifts in demand and market structure. According to a report by Sindipeças, OEM (Original Equipment Manufacturer) sales grew by 5.7% in July, driven by increased volume from traditional clients and new contracts. Notably, some system integrators have begun supplying Chinese automakers, albeit in small volumes.

While July saw a nominal revenue increase of 6.3% due to higher business with automakers and the aftermarket, the year-to-date figures show a 1.8% decline in nominal net revenue. The aftermarket and exports have faced contractions of 5.2% and 12.4%, respectively, since the start of the year.

Simultaneously, the Chinese automotive industry is entering a phase of consolidation driven by excess capacity and price wars. Major state-owned entities are integrating, such as the agreement between GAC Group and FAW Group to integrate industrial resources. This consolidation, characterized by a mix of crisis and restructuring, may impact global markets, including Brazil, as companies strive for operational efficiency in the electric vehicle sector.