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75 AutoData | October 2018 “We would never expect a reaction with this intensity. It exceeded every expectation.” José Antônio Fernandes Martins, of Fabus Closing 2019 GDP 3% 1 US$ = R$ 3,70 to R$ 3,80 Selic (interest rate) 7% to 8% Inflation 3,9% to 4% to 21.5 thousand units as final result for 2018, domesticmarket from 16.3 thousand to 16.5 thousand and 5.2 thousandmore in exports. For 2019, Martins calculates a 15% to 20% increase in production, close to 25 thousand units, approaching 2014 results, when the sector produced 27 thousand 967 bodies. The Brazilian domestic market is expected to advance 20%, close to 20 thousand units, and exports from 10% to 15%, at the range of 5,7 thousand units. There are several bases to sustain the estimated growth for 2019. One of them is the program Caminho da Escola (Way to School), which bid 6 thousand buses in 2018 and only half was delivered. The Refrota, managed by Caixa, has R$ 3 billion to finance the purchase of urban vehicles and was delayed this year because of the bureaucracy and the restructuring of the institution’s vice-presidencies. Still, accor- ding to Martins, it accounted for 1 thousand units. The available value, he calculates, allows the purchase of up to 8 thousand vehicles. And besides, with the drastic drop in purchases in recent years, the fleet has aged, resulting increased maintenance costs, which threatens the operation: “The companies are forcing themselves to a renovation because the city bus is a vehicle that wears out more quickly due to conti- nuous use and infrastructure conditions”. On road buses, which almost doubled sales in 2018, interstate operators must ac- quire around 2 thousand units per year until 2021 to meet the demand of the ANTT, the Brazilian National Land Transport Agency, to reduce the average fleet age from 9,8 years to 5. “Regardless of who is the elected pre- sident we have programs and demands that will sustain the growth of the sector in 2019. But it is a certain that we will have to dialogue to find alternatives for the fu- ture: public-private partnerships will be necessary to rebuild and modernize the infrastructure.” Regarding exports, the growth expec- tation is basically due to the exchange variation. According to Martins, Brazil has recovered market in recent years because its price became more competitive com- pared to other rivals. He believes that the current rate, in the house of R$ 4, is specific and should not be maintained: “I believe it will stay from R$ 3.60 to R$ 3.80. And until R$ 3.50 the sector can be competitive abroad”. For Martins, the next government will, necessarily, have to carry out the welfare reform, tax, political and administrative reforms as well: “Without reforms, Brazil will not grow”. Martins does not believe in economic and financial disruption, with the inflation’s jump, the Selic interest rate and the dollar raises, as it is happening inArgentina.What can be problematic, he said, are the tra- de disputes of the great powers, such as the United States and China: “If they lose space in the US market, it is certain that the Chinese will look for other solutions. And Brazil is one of them. “