Brazil has lost a place on the global production table to India, according to the International Organisation of Motor Vehicle Manufacturers (OICA) report for 2011.
Brazil relinquished its place as sixth largest producer of cars and light/heavy commercial vehicles to India last year.
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The country produced 3.4m units, up 0.7% year on year, while India reached 3.9m, up 10.7%.
The gap between the two automaking countries widened after Brazilian automakers’ association Anfavea removed CKD kit production from the country’s tally to avoid double counting – the same unit would otherwise be counted both in the supplying country – Brazil – and the country in which the completed vehicle is final-assembled.
To be fair, under this new criterion, Brazil would have been defeated by India by 2010. High internal costs and the recent high value of the Brazilian real have slowed exports.
Full imports also grew their local market share at the expense of locally-assembled vehicles, firmly supported by exchange advantages. The two factors combined explain the difficulty the Brazilian auto industry is facing to grow production further.
In terms of market size, Brazil ended last year ranked fourth but India is likely to ascend to this position in 2012. Domestic sales volumes are not tallied by OICA which compiles its production rankings from data supplied by national automaker associations. Consulting firms like JATO also use these statistics.
Even so, according to Anfavea, total investment by automakers and suppliers (agricultural machinery makers included) topped US$76bn between 1980 and 2011. The peak investment period was 1994-2000 when a new Brazilian automotive industry regime was imposed.
By 2015, a new cycle of investments will raise the sum to a cumultative $100bn over 25 years.
The tally includes manufacturing units, expansions, new products and technologies, training and R&D expenditure.
Brazil is currently home to 19 motor vehicle OEMs and seven agricultural equipment makers while newcomers, including Chinese firms and BMW, are waiting in the wings.
just-auto blog: Over 80m vehicles produced in 2011
