Hondas new HR-V is one of three new compact SUVs due on sale in Brazil in 2015

Honda's new HR-V is one of three new compact SUVs due on sale in Brazil in 2015

In the last 12 years, as annual new vehicle sales have climbed 140%, the Brazilian buyer profile has changed and, even more, so has product segmentation.

This is due, to a great extent, to an increase in comsumer buying power and because the cost of new cars has risen at a rate lower than inflation in real terms, no matter what index is used.

At the bottom of the market, retail prices have risen an average of 14% compared with a 32% rise in basic wages.

The entry level segment in Brazil is by far the most important and effectively subdivided into three (base, intermediate and top specifications). 

Today, 70% of vehicles leaving a Brazilian assembly line have air conditioning and 60% power steering. Connectivity features once reserved for large, expensive models are now standard in 25% of base models and in 35% of entry level, intermediate segment cars.

However, standard-fit safety equipment has long lagged behind western markets and local production is effectively some six years behind western Europe in platform/architecture and specification terms but, as new global architectures are introduced here and sales recover, the gap is expectd to narrow.

Segmentation by body type amongst Brazilian passenger cars is: 60% compact of which 41% are hatchback; 18% saloons; 1% estate/wagon; 10% pick-ups; 9% SUVs; 4% mid-size models, 4% 'monocabs' [minivan/MPV-style, eg Citroen Picasso - ed], 1% large vehicles and 2% 'others'. 

A growing preference for sport utilities is explained by the good visibility they offer in traffic and their greater ability to deal with Brazil's poor roads and dirt tracks thought this trend equally reflects Brazilian buyers' increased purchasing ability.

Though the model choice is still limited (Ford EcoSport, Renault Duster and Chevrolet Tracker) the choice of models in the compact SUV sector is expected to grow from 2015.

Three debuts for next year already are certain: Honda HR-V, Jeep Renegade and Peugeot 2008. Together with the launch of new medium-size SUVs, this vehicle type soon will represent 15% of the Brazilian market, largely at the expense of the saloons and monocabs.

As for subcompacts, the road ahead is still unclear. There are fewer children in Brazilian households these days so the need for passenger space and large load areas in family cars has diminished somewhat.

On the other hand, households able to purchase a second car are expected to grow and the extra car could still be a subcompact: smaller dimensions are advantageous in city traffic and when parking.

Better fuel economy (especially compared to SUVs) and a more affordable price also help yet doubts remain about their continuing acceptance and market dominance in coming years.

Automatic gearboxes are likely to lure customers because, besides their greater convenience in heavy traffic, they have become much more efficient in recent years, reducing the fuel economy penalty going automatic once incurred. 

Even colour choices have changed. For decades now, white, once the most popular and suitable colour in this hot climate, has been replaced by silver and black.