Struggling through financial crisis on an empty tank of gas, the world’s car industry has felt the impact. The road to economic recovery is littered with the wreckages of companies written off by reduced consumer spending, rising fuel prices and increased costs of raw materials. However, Gauss Indústria e Comércio de Autopeças Ltda, the Brazilian manufacturer of car parts, has not only survived the journey but grown considerably to become one of the world’s leading producers for the automotive industry.
“We produce components for engines, and sell to distributors of parts,” explains partner and proprietor of the company, Afonso Borgonovo. “Around 15 percent of our production is destined for new automobiles, and 85 percent for replacements and repairs.” The division of business has been particularly favorable in times when sales of new vehicles have hit an all time low. Rather than buy a new car, customers are preferring to repair and service the old one by replacing essential engine parts actually boosted Gauss’ sales.
Between 2008 to 2009 the company grew by 8 percent in spite of market difficulties. “On average we have grown by between 30 and 40 percent over the last 10 years,” confirms Borgonovo. The statistics are impressive for a company that was launched just over 10 years ago in 1997. Its growth from an enterprise specializing in reconditioning automotive parts to an internationally recognized brand and supplier is the result of hard work and dedication to the industry. In 2000 Gauss constructed its current, 8,000-squaremeter factory in Curitiba, in the southern state of Paraná. The expansion was accompanied by the decision to produce its own product line, to which the company has been adding ever since.
Today, Gauss produces a range of parts for engines, including ignition modules, fuel pumps, rectifiers, voltage regulators, airflow meters and oxygen sensors. The electronic and injection technology is produced on site by Gauss, while other components are imported from external sources.
There is a heavy emphasis on quality at all stages of production and internal processes are controlled through a system known as PDCA, which standardizes planning and manufacture of the products. Gauss also prides itself on having the best technological resources available at its facility. The specially air-conditioned manufacturing laboratories within the factory cover 3,600 square meters and house diverse equipment such as thermal chambers, digital oscilloscopes, precision multimeters and testing machinery. “All of the equipment used to test our parts, in controlled conditions is designed and manufactured by us,” Borgonovo says.
In addition to state-of-the-art technology, Gauss relies on the skills of its professionals. The industrial designers, engineers and technicians are all highly qualified and ensure the precision and effectiveness of the equipment and products. They also operate the simulators that have been developed in-house and reproduce real working conditions to test the components rigorously. “Our performance adheres strictly to ISO: 9001/2000 norms,” Borgonovo says. Constant reevaluation of all stages of production is also a feature of processes at the facility and has helped maintain the ISO certification for the last five years. Audits are carried out every six months to guarantee the company’s administrative processes and facilitate the continued excellent standards of its products.
Gauss is also one of the only companies in Brazil to test and train professionals in the area. Since its inauguration, the company has successfully trained more than 4,000 electricians and technicians in the sector, using processes at the factory as a reference and a basis for instruction of skills and techniques that can be applied in the industry.
COVERING NEW GROUND
The strategy to grow and be the best in the market is a driving force behind many decisions made by Gauss. In 2007, the company acquired a high-tech manufacturer of hybrid circuit systems, adding to its existing product line and boosting sales and growth statistics. The purchase was also a move to provide a broader range of products to its clients.
In the same year, Gauss took the important decision to open a plant in Xuzhou, China. The project, which is a joint venture with Chinese investors, involved sending both equipment and professionals from Brazil to initiate and oversee production. The Chinese facility now manufactures components for the Brazilian market and was the perfect solution to competition from Gauss’ cheaply priced Chinese rivals. With the exchange of resources, labor, experience and information between the two countries, Gauss managed not only to maintain 75 percent market leadership in Brazil but become one of the world’s leading producers of voltage regulators and rectifiers.
The new factory also increased overseas markets for Gauss. Already a prominent brand in Latin America, the company exports to automotive parts distributors in more than 40 countries. The largest international market is Eastern Europe, where Poland is a major manufacturer of engine spares.
Participation in the main national and international automotive trade fairs keeps Gauss constantly updated with the market changes, as well as in continuous contact with the consumer. Such events are also important in directing future staff training initiatives.
“A vital part of our success is our creative approach to the business. Customers can rely on us to bring the latest, high-tech solutions to the market at reasonable prices,” says Borgonovo. In fact, the only repercussions of the crisis were reflected in a dip in sales in the first quarter of 2009, a setback that has already been overcome, following a sharp increase in sales since March. As with any company that operates on an international scale, the exchange rate can dramatically affect sales. The decision to open a factory in China avoided the threat of cheap imports and allows greater flexibility with regards to international markets. “The Xuzhou facility was a strategy for survival that actually propelled us further forward in the industry,” confirms Borgonovo. The constant entrepreneurial spirit of executives at Gauss has maintained a dynamic and resourceful approach to the market, making inadequate employment laws and undefined industry standards no obstacle for the fast-growing company.
A newcomer in the industry, Gauss has quickly overtaken competitors to take the lead. In just 12 years, the company has swerved to avoid crisis and established itself as a market reference. With innovative business solutions and creative strategies, Gauss continues to search for new opportunities, guaranteeing the continued satisfaction of its clients worldwide.