As Brazil’s auto industry broke more production and sales records month after month in 2010, the country was also the fourth largest global market after last year’s data was tallied up. The 3.52m autos (cars plus light and heavy commercials) sold last year were an indisputable demonstration of strength.
The 12% growth over 2009 exceeded the most optimistic expectations, partly due to a ‘distortion’ that occurred late in December, when record sales for that month were achieved.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
It is estimated, depending on the source, that between 30,000 and 40,000 units were pre-registered by automakers or dealers but not delivered to customers.
This is not uncommon here or in other countries and is is a known marketing manoeuvre – when an automaker looks like falling short of a market share goal, it ‘kindly asks’ dealers to temporarily ‘sell’ to specific people or companies.
This procedure – known locally as ‘rapel’ – became well known here in industry circles in 2004 when GM artificially ‘led’ the market. The automakers, of course, never confirm they have used the tactic, yet it cannot be hidden.
Some check will be possible at the end of this month by comparing market shares with December’s – January sales historically are 25% to 30% lower than December due to the fact that it’s summer in the southern hemisphere and many potential Brazilian new vehicle buyers are on holiday this month.
The 3.64m-unit production total – including both fully assembled and knocked-down kit exports – was also impressive with its 14% increase over 2009. The result was less outstanding than 2010 sales, Brazil was only the globe’s sixth largest auto producer.
For 2011, trade group Anfavea has forecast 5% sales growth over 2010 to nearly 3.7m units but reckons production will rise just 1%, reflecting a combination of slowing export orders and increased imports of complete vehicles (19% market share in 2010; 22% forecast for this year). This will also slow auto industry jobs growth.
The 30 brands affiliated to the Abeiva group (vehicle importers with no local production) sold 106,000 units, up 144% over 2010. The group foresees a 57% rise in 2011 to 165,000 units which would surpass the 1995 record.
Abeiva president José Luiz Gandini told just-auto that this year’s forecast was based on an average US dollar exchange rate of R$1.90 (currently R$ 1.70).
Anfavea members, who have local production/assembly facilities as well, accounted for 80% of the fully imported vehicles, which came mostly from Argentina (with huge proportions of Brazilian-made parts such as engines) and Mexico. Both countries have free trade agreements with Brazil, exempting their vehicle exports from the 35% import duty (known as ‘II’) applied to built-up units from other countries.
There is an ongoing discussion about this high tariff, the maximum allowed by the World Trade Organisation. On its own, II accounts for about 12% of the suggested retail price of an imported car, making it 27% more expensive than the locally assembled equivalent.
In 2010, Brazil imported 30% more fully assembled vehicles than it exported.
The four ‘traditional’ brands continued to lose market share here last year though they nonetheless accounted for 73% of car and light commercial sales due to additional local assembly of French, Japanese and South Korean-sourced models.
Ford and GM both maintained the previous year’s 12% growth but Fiat grew just 3.2% and VW only 1.9%.
See also: BRAZIL: Vehicle market hits new record in 2010
