The good times have returned to Mercosur's car market. The Brazilian market set a new record of 2.5m car sales last year, an increase of 28% on 2006, and the year-end total was higher than even the pre-economic crisis benchmark set in 1997. Much the same is also true in Argentina, where increased demand has resulted in mothballed car plants being brought back to life. In this month's briefing we investigate the future prospects of this market, and focus on developments in the Brazil/Argentina free-trade agreement, components problems and investments in facilities. Eleven manufacturer profiles are also provided, and they comment on the company's movements in the market, and their plans for the future. Sales and production data for the Brazilian and Argentinean markets is also included.