Brazilian Volvo Penta production starts

01 July 2016

Manufacture of Volvo Penta’s industrial engines has begun at the Volvo Group plant in Brazil. The engines – aimed at the generator set market – are produced at Volvo’s facilities in Curitiba.

A new production line has been created at the plant for the Volvo Penta engines, which include the 13 litre TAD-1344GE and TAD-1345GE models.

“As part of the Volvo Group, we are investing further to leverage our established manufacturing operations,” said Ron Huibers, president of Volvo Penta of the Americas.

“One of Volvo Penta’s ambitions is to improve our global supply chain for our products with competitive lead times, at a competitive cost. By producing these industrial engines in Brazil, we’ll be offering an added benefit to our customers in South America.”

Gabriel Barsalini, head of Volvo Penta South America, added, “Localising the production of industrial engines within the Volvo Group’s world-class manufacturing facility is part of Volvo Penta’s growth strategy in South America.

“We are recognised leaders in the marine leisure segment in Brazil and have recently been expanding our activities in the industrial sector, particularly in the power generation segment. This is a market with good potential.”

Growing sector

The power generation segment (stand-alone production) is growing in importance, particularly in Brazil, given that the demand for energy is higher than the supply.

Another advantage of producing the industrial 13-liter engine in Brazil is the eligibility for FINAME financing, a Brazilian Development (BNDES) programme featuring lower interest rates than those available in the private sector market.

Over the last two years, Volvo Penta has also worked in structuring the after-market service delivery for the leading OEM genset builders in the region.

João Zarpelão, Volvo Penta South America industrial engine director, explained, “Before beginning production of the engines in Brazil, we worked on establishing a support network for our customers, which is fundamental for the delivery of quality and for the success of our business.

“Volvo Construction Equipment distributors Tracbel, Link and Entreposto have similarities with the Volvo Penta business, which will drive gains of scale for us.”

South American strategy

Volvo Penta’s business plan in South America targets increased engagement with potential partners in the countries of Ecuador, Bolivia and Paraguay. Currently, Volvo Penta’s main markets in South America outside of Brazil include Argentina, Peru and Chile.

Ms Barsalini said, “These are markets with potential, both for both marine and industrial engines, but in which our presence is still very limited.”

The investment supports Volvo Penta’s growing business relations with the main genset manufacturers, a strategy that it said allowed it to cover 70% of the market based on partnerships.

Mr Zarpelão said, “Our target is to become the preferred professional partner of companies operating in the segments of power, construction, agriculture, ports and mining.”

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