Carmakers including GM and Nissan are struggling to find available port capacity in Brazil, which is hampering the flow of vehicles as sales rise in the country.
According to sources, Nissan is struggling to find available port capacity in Brazil able to accommodate imported vehicles and parts from Mexico.
Nissan is facing difficulties at the port of Paranaguá for both vehicle imports and parts destined for its production facility in the city of São José dos Pinhais. A lack of available space at the port means the manufacturer, which plans to expand output at its existing plant over the next few months and invest $1.5 billion in a new facility in Resende, has had to negotiate with the port of Vitória, in neighbouring Espírito Santo, to discharge consignments of Sentra, Tiida, Versa and March models.
This lack of capacity is also beginning to impact negatively on Nissan's ability to get sufficient models to the market, given that in the last 12 months Brazilian sales have gone up by 83.5% (though it only has a 2% share of domestic car sales in Brazil). As a result, the company is being forced to seek a third port, although has conceded that this could significantly add to its overall logistics costs. A source at the company noted that alternatives are thin on the ground, incur extended waiting times to dock vessels and offer poor productivity in terms of discharge.
General Motors is experiencing similar headaches in Rio Grande, where the port superintendent said that the number of vehicles discharged by the company during the first seven months of this year rose by 15.51% compared to the same period in 2010. The majority of these were manufactured in Argentina, although others come from Canada, the US and Mexico.
However, the main storage area for vehicles at the port is now full, prompting the port authority to make use of other vacant plots. Some 5,000 GM vehicles are now being held on site, with road transporters, daily, shifting 200-300 vehicles from the port to dealers.
In addition to difficulties in releasing imported vehicles, the large numbers held at Rio Grande also reflect a cooling off in demand, which was much higher earlier in the year.
Elsewhere in the country there appear to be lingering problems with the import of vehicles from Argentina because of the import licence dispute that has been disrupting vehicle flows since May.
Since May, Brazil has failed to automatically grant licences for finished vehicles and parts from Argentina, such as. This is a tit-for-tat measure adopted by Brazil following similar restrictions placed on imported Brazilian products by Argentina.
Despite earlier assurances that the dispute was now under control, clearing an imported car from Argentina, which took just two days in the first quarter of 2011, is still taking up to 60 days according to the contacts at the port of Paranaguá and the Antonina Port Authority (APPA) in Brazil.
On October 17, some 14,000 imported cars, the majority of which came from Argentina, were awaiting release at the port, which created serious problems given that the storage area there is only capable of holding 6,000 vehicles. The situation prompted APPA to have to make use of vacant warehousing.