5 Anuário Abipeças e Sindipeças Abipeças and Sindipeças Yearbook 2025 From the President Currently, global geopolitics requires constant surveillance, intense dialogue, and increased consultation. From the escalation of the Eastern European and Gaza Strip conflicts to the paradox of the protectionist measures implemented by the American government, we are witnessing the development of complexity and imbalance that they represent. As we all know, the challenges of producing efficiently and profitably are rising. In our sector, we see trends related to connectivity, enhanced security, energy transition and efficiency, and in the not-so-distant future, self-driving vehicles”. In addition, new business models to attend to the consumer and the ongoing technological revolution launch significant challenges, especially in a local context where 44% of the highest-income households bought/replaced their vehicles in 2005, while only 18% did so in 2023. We face this reality daily and yesterday’s effective practices may not be effective tomorrow. New rounds of consolidation will happen in the sector, aiming to raise the volume and acquire strength to face the large – and necessary – investments in R&D, digitalization, artificial intelligence, and other technologies. I understand that this consolidation will happen at all levels: OEMs, Tiers 1, Tiers 2, and 3. “Here in Brazil, we have opportunities that distinguish us from the rest of the world, allowing us to achieve great things in the future.” In March, I attend the G7 meeting, a group consisting of the automotive associations of the USA (Mema), Mexico (INA), Brazil (Sindipeças), Canada (Apma), European Union (Clepa), Japan (Japia), and India (Acma). At that time, we had the opportunity to present Brazil as a low-carbon economy and sustainable energy matrix, which makes us an excellent investment option, in addition to the potential of the new hydrogen and biofuel technologies that we are already developing. The latest global dynamics, driven by China, brings the need for a collaborative approach between these associations and require companies worldwide to strategically decide where to produce, with lower carbon footprint sustainability practices. Decarbonize will be a cost reduction parameter, provided that the choice of regions/countries new investments is appropriate. In such a way, due to its clean and sustainable energy matrix, Brazil has the conditions to be in the vanguard of this process. It should be noted, in this sense, that the voluntary offsetting of emissions in the automotive sector should evolve rapidly, since the prices of a ton of carbon for offsetting in Brazil are at a low level, and the sale of credits, especially after the regulation of the carbon credit market in Brazil (Act nº15.042/2024), arising from the reduction of emissions through the improvement of production processes, can even be monetized in international markets at advantageous prices. The challenges for 2025 are more visible. Besides the headwinds from global geopolitics, we will be facing the tough competition of Chinese vehicles - which accounted for 2.8% of the sales in 2023 and achieved a remarkable percentage of 8.8% last January. The obstacles arising from rising interest rates, exchange rate volatility, and evolving demands for energy efficiency, safety, and emissions, are all pushing toward sustainable mobility. I think the sector is ready to tackle and overcome these challenges, trusting that we are fully capable of leading the decarbonization process worldwide. As I stated in my inaugural address for my new term until 2028: “We never even considered the possibility of giving up on our historical vocation of producing and integrating this complex and passionate automotive supply chain, facing all challenges in our path with resilience. The vanguard of the mobility sector in Brazil Cláudio Sahad President of Abipeças and Sindipeças
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