For decades, the Brazilian automotive market was closed to imports. During this time, it was dominated by a mere handful of major manufacturers known as the “Big Four” – Volkswagen, Ford, GM, and Fiat – all of which had installed plants in the states of São Paulo and Minas Gerais during the late 1950s and 1960s. It wasn’t until the late 1990s that the federal government finally passed legislation allowing for the importation of foreign-made cars.
A Complete Product Portfolio
This opening up of the Brazilian auto industry was the catalyst for the creation of the SYL Automotive Group. The São Paulo-based company started out importing undercar parts, in particular friction parts, for both the domestic and imported auto spare parts aftermarket. It wasn’t long, however, before the business decided to branch out and begin making its own parts for the aftermarket. After investing in a new 79,000-square-foot facility located in Sorocaba, an industrial town an hour outside of São Paulo, SYL set to work manufacturing brake pads for the national and global markets.
“At the time, dozens of foreign manufacturers were arriving on the scene – Toyota, Mitsubishi, Nissan, Alfa Romeo, etc. – and demand for our products really took off, not just here in Brazil, but in the rest of the world as well,” recalls SYL’s president, Avi Gelberg. “We started producing our first brake pads in 1999 and five years later we were already leaders in terms of the aftermarket for these items.”
Its rapid success inspired SYL to expand its brake system portfolio. In addition to pads, a second 20,000-square-foot facility in the city of Mogi Mirim also began churning out brake shoes and linings. More recently, a third 33,000-squarefoot plant in the nearby town of Itu has been gearing up to begin production of brake drums and disks, thus allowing the company to round out its supply of brake system components. As it is, total production output of all parts amounts to 5.3 million items a year.
Today, in addition to continuing to stake claim to its leadership position in terms of brake pads – with a 31 percent share of the market – SYL is also a top provider of brake shoes. Currently, brake pads account for 93 percent of its business, which this year is expected to earn revenues that hover around US$ 50 million; the result of having seen business blossom by 36 percent over the last few years (2008-2012).
Secrets to Success
When asked to explain the secrets of SYL’s success, Gelberg points to two main factors. “First of all, we really prize efficiency. We work with a very low aggregate of costs and we have very targeted production costs,” he says. “Secondly, we do very aggressive marketing of our products. As a result, SYL brake parts are well-known all over the country.”
Additionally, SYL makes an effort to stay abreast of new industry practices and technologies that crop up around the world. One example is the use, particularly in the United States, of copper free brake pad formulations. Another is the increasing employment by international manufacturers of ceramic formulations for the production of friction materials. “We’ve incorporated many such developments into our products,” declares Gelberg. “Meanwhile, a major point in our favor is the fact that we never worked with asbestos, unlike many other companies in Brazil. This has had positive ramifications for us in the market.”
In order to stay in the competitive vanguard, SYL invests significantly in product development, specifically with respect to friction materials. It’s indicative that its in-house R&D department is one of the most important sectors in the company.
In terms of friction materials, each factory possesses its own technology and formulations. In addition to many formulations being distinctive, they are also segmented according to car group (groups are differentiated by factors ranging from the vehicle’s weight to the torque of a brake system). Indeed, the company carries out detailed studies related not just to brake pads, but to systems in their entirety as well as to the specific needs of the various car groups.
“We invest a lot in the development of friction materials and, as a result, the quality and performance of our products are very high,” affirms Gelberg. “While many of our competitors are providing aftermarket products to the aftermarket, we’re providing the aftermarket with OE products that boast a long life and yield superior results; this constitutes a major differential in this segment.”
Another major differential is SYL’s client-oriented corporate philosophy, which focuses heavily upon determining the needs of its clients and receiving feedback. Aside from constantly updating aftermarket clients on new technology and meeting with them to exchange ideas, SYL also organizes courses about brake systems that are administered to the workers and technicians who actually put together the cars. Says Gelberg: “Because we’re so close to it, we have our pulse on the day-to-day behavior of the market. This is essential because today changes occur very rapidly and, in turn, we have to be able to react very quickly to market demands. The upshot is that it’s much easier for us to make our clients happy.”