formally commit themselves to observe and comply with the stipulated rules of

behavior.

Good Business Combined with Good Governance Gets Results

Marcopolo now not only offers a complete bus body products line but also offers in-
house engineering and design services, customizing products to any chassis-maker and
to any customer specifications. Customer loyalty, a strong brand and market diversifi-
cation are important characteristics of Marcopolo’s business. Production flexibility and
installed capacity enable Marcopolo to deliver large volumes of different products in a
short-time span, at competitive prices, using low capital and high inventory turnover.
Marcopolo delivers reliable and quality products.
A bus body usually takes up to 800 to 1,200 hours of labor to build. It is a labor-
intensive process. Therefore, having motivated and skilled people is essential.
Marcopolo values its highly skilled, fully-trained and motivated labor force. Marcopolo
employs approximately 11,000 people worldwide.
As part of its strategic plan, Marcopolo had decided to become a global player. The
reasons for international expansion strategy are related to the company’s needs to:
n Grow at a rate higher than that of the market;
n Diversify economic and political risks;
n Minimize fluctuations in global production due to volatility in regional
demands;
n Benefit from economies of scale; and
n Increase returns to investors.
Taking this strategy from plan to action, in the early 1990s the company intensified
its move towards globalization and accelerated it in the last few years. Besides the three
bus body plants located in Brazil, the company now operates plants in Mexico,
Colombia, Portugal and South Africa. Earlier this year, the company announced a joint
venture with Ruspromauto, the largest manufacturer of vehicles in Russia. In May
2006, it announced a joint venture with Tata Motors, the largest automobile and truck
company in India. Exports jointly with revenues from Marcopolo’s operations abroad
accounted for 55.5% of total revenues in 2005, up from 52.7% in 2004.
Consolidating Marcopolo’s global product market results, Marcopolo’s results are
rather impressive. The financial statements are prepared in accordance with both
Brazilian GAAP and US GAAP. A snapshot of the most recent annual financial indica-
tors is presented below:

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