BRP told Bloomberg News that two of its Mexican facilities are preparing for a 20% increase in production output by next April. BRP CEO Jose Boisjoli said the move was in response to heightened demand for personal watercraft and off-road vehicles. BRP CEO Jose Boisjoli told the news site that it is investing about C$25m on the expansion. It is already thinking about the next step in increasing production after that.
“Our next capacity increase is scheduled for the spring of 2018, and we are monitoring the trends in demand to determine when the next investment after that will take place,” Boisjoli told the news service. “Often it takes one year to reach the next threshold between the moment you order the equipment and the moment you start production.”
The Quebec-based company raised its full-year forecast for per-share earnings to as much as C$2.35 after reporting second-quarter profit that exceeded analysts’ estimates. BRP sells about half of its products in the US, with Canada contributing about 18%. BRP is closely watching talks on the renegotiation of the North American Free Trade Agreement.
“Consequences of a redesigned Nafta are so huge that I think common sense will prevail,” Boisjoli said. “There’s a presidential election in Mexico in 2018, and the US will be getting closer to midterm elections, so both countries will want to move fast. Even if there are changes, we think there will be enough time for industries and companies to adapt.”