HAMBURG, Sept 11 (Reuters) - German truckmaker Daimler is bracing for a prolonged slump in Brazil as shrinking growth in Latin America’s largest economy and corruption probes weigh down business.
“I expect no fundamental recovery in the next years,” Daimler trucks chief Wolfgang Bernhard told reporters at a briefing late on Thursday.
“The scandals are paralysing everything,” he added, noting it may take as many as three years for the Brazilian trucks market to rebound.
An investigation into state-run oil company Petrobras has paralysed Brazil’s construction industry and derailed some oil projects, inflicting damage on the country’s embattled economy.
Stuttgart-based Daimler said last month it had struck a labour deal with workers at its Brazilian trucks plant in Sao Bernardo do Campo that delayed the planned layoff of 1,500 staff until August 2016.
Employees at the plant have agreed to cut both their working hours and their pay by 20 percent, with the Brazilian state ready to compensate workers for half of the pay reduction.
Separately, Bernhard said truck demand in China may plunge between 30 and 40 percent this year as the government there delays infrastructure projects.
But solid demand in the United States and Europe, where volume will likely grow as much as 15 percent each, will help Daimler compensate for any lost business, the executive said.
Daimler is planning to resume business in Iran following the country’s nuclear deal with world powers, Bernhard said. The accord looks likely to be implemented after efforts by U.S. Republicans to kill the agreement collapsed on Thursday.
“We will revive our activities which we let rest for many years,” he said. “Iran is a great opportunity for us.” (Reporting by Jan Schwartz; Writing by Andreas Cremer; Editing by Mark Potter)