BRAZIL: Optimism for 2012 on the rise again
Recent measures announced by the government to incentivise consumption have prompted consultants and major auto sector players to get their calculators out again.
Not that next year’s sales would be that bad, but predicted growth above that of the economy in terms of GDP percentage was out of whack. Since GDP is expected to rise between 3.5% (pessimists) and 4% (optimists), these were the expected auto sales rises expected as well.
At the recent XXI Fenabrave (national dealers association) congress, in São Paulo, consultant Maílson da Nóbrega was one of the first to admit that eased credit, an interest rate slash and more flexibility on down payments and installment payments will echo positively in the market.
Nóbrega believes that credit offered by banks and financing companies for cars and light commercials – representing 95% of total sales – is bound to grow 20% in comparison to 2011. Therefore, it would mean recovering, at least in 2012, the trend observed in the last few years of the auto market rise surpassing GDP. His bet for next year is a sales increase in the country of 5% to 6%.
It this ever happens it would be, in fact, a great result in view of all the negative world economy news, especially in Europe. Some industry executives polled by just-auto are more cautious, though. Growth aligned to GDPs would be just right, in their view.
Yet Anfavea said last week that 2012 sales will grow somewhere between 4% and 5%.
In the medium and long terms the Brazilian middle-class expansion (up to R$5,000/$2600 monthly earnings), which keeps the new car as goal, is likely to support market growth.
Economist Eduardo Gianetti da Fonseca pointed out at the same congress the so-called 'Brazilian demographic bonus'.
The economically active population for at least the next 20 years will remain sustainably larger than children, teenagers and the aged. A mass of millions of adult Brazilians with ever increasing buying power through higher income and education.
It's far from an euphoric scenario, though, because education quality must develop dramatically and infrastructure deficiencies, bureaucracy and tax burdens are still far from minor obstacles.
One example: in Brazil, just 13% of a 1.6m km (1m miles) road network is paved. According to Alfredo Peres, of the transporters’ body NCT and Logistics, this percentage is well behind other emerging countries like Mexico, India and Turkey.
The Fenabrave congress always attracts top auto executives. Philippe Varin, PSA Peugeot Citroën world president, was the keynote speaker.