Amazon Region drought already hitting motorcycle plants

By Redação AutoIndústria | 10/10/23 | Translated by Jorge Meditsch

Collaboration: Mário Curcio

The Northern Region drought is impairing fluvial transport and already affects Manaus motorcycle plants. The two larger Amazon motorcycle industries confirm the problem. Yamaha, which has 19% of the Brazilian market, informs to be “adjusting production to the supply arrival, reducing production and choosing the products it is possible to manufacture”. The company produced this year 26.5 thousand motorcycles monthly on average.

Honda was less clear about the problem but did not deny it. The manufacturer says it “keeps monitoring the drought situation and adopting alternate options with suppliers and business partners to minimize possible operational impacts.” Honda is the motorcycle market leader, with 71% of the sales. It produced 99.3 monthly in Manaus this year.

The drought impairs the arrival of parts and raw materials to the industry’s assembly lines in Manaus and the shipment of the products to other states. The freight for a low-displacement motorcycle to São Paulo costs about R$ 800.00. Dealers consulted from October 7 through 9 said they do not know “if” or “when” the cost will increase, but it seems unavoidable.

Wilson Azevedo, vice president of Amazonas’ Industry Federation (Fieam), said in a television interview that the fluvial transportation sector is already charging an additional “Dry Tax”: up to R$ 4.5 thousand extra for containers arriving at the industries. And up to R$ 2.6 thousand for those leaving the plants.

The price increase is due both to navigation difficulties and the reduction of ships’ cargo capacity. Those usually transporting three to four thousand containers now carry two thousand. For some segments in Manaus Free Trade Zone, like electronics, the freight would be already 40% to 50% more expensive.

One week ago, Fenabrave was forecasting 1.63 million motorcycles delivered by the end of the year, but this estimate could be affected by the drought. Nonetheless, the supply problems are not harming all motorcycle industries. BMW says its Manaus plant production planning was not affected by the drought.

Ducati, Kawasaki and Royal Enfield gave similar information. Those companies’ volumes are much lower than Honda and Yamaha’s. Together, BMW, Ducati, Kawasaki and Royal Enfield account for only 2.2% of the Brazilian market.