This year will see over 3m new vehicle units sold in Brazil, including commercial vehicles, nearly 7% growth and better than expected.
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Brazil withstood the global credit crisis with just a two-quarters recession. A history of wild inflation better positioned the country to take measures such as trimming interest rates, compulsory deposits and taxes with better results than elsewhere and was a stimulus for the domestic auto market.
However, vehicle exports in 2009 may be lower than imports for the first time and this has caused a production downturn and job cuts. However, most imports come from Argentina, with a large content of Brazilian parts and engines.
But, what to expect for next year? At the Autodata Perspectives 2010 seminar, in São Paulo, optimism prevailed. Most executive speakers bet on 5% to 6% growth in comparison to the all time record year of 2009. That’s very positive, because a current excise tax cut incentive finishes on 1 January.
Credit defaults are falling, thus stimulating interest rate reductions for financing. But the biggest support in 2010, however, will come from the around 5% growth of the Brazilian economy as whole. The first two months could be difficult due to forward buying to take advantage of the tax discount before the end of 2009.
Export difficulties will persist. Anfavea president Jackson Schneider called again for the definition of an industrial model that “protects local production and does not turn us in mere buyers of imported vehicles”.
Among other challenges, Ford’s Rogélio Golfarb cited more safety and emission regulations due in coming years. “There will be vehicle cost and weight increases,” he said. For 2010 he sees local market growth of 5%.
General Motors president Jaime Ardila was cautious. Though admitting that consumer confidence is on a high and the economy is expanding, he foresees 2010 sales equal to 2009’s.
Fiat expects 1% to 5% growth next year. Commercial director Lélio Ramos is optimistic for the next few years.
“Investments in mass transport as planned for the big cities will also push auto sales. Traffic improves and it stimulates rational use by drivers.”
VW’s president Thomas Schmall believes 3% to 6% growth is likely in 2010. He was sure about the future: “By 2014 Brazilians may end up buying 4.2m vehicles per year, commercials included, something like 40% over 2009. And we will be very strong in small cars and biofuels.”
His company will announce new investments late in November.
Fernando Calmon
