Rush-hour traffic in Sao Paulo, Brazil

Rush-hour traffic in Sao Paulo, Brazil

A study by auto industry lobby group Anfavea on the evolution of the Brazilian market for the next 20 years, presented at a recent Harvard Business School (HBS) seminar in São Paulo, attracted considerable interest from companies eyeing the local market.

Anfavea's study reckons Brazil’s current ratio of five inhabitants to one vehicle now will evolve to 2.4 per vehicle by 2034 (optimistic 2.1, pessimistic 2.7).

Today’s fleet is 40m units, excluding two-wheelers. Within two decades the country likely will more than double its fleet to 95m (optimistic 106m, pessimistic 85m).

As a reference point, the mainland US (excluding Alaska and Hawaii) is slightly smaller than Brazil and has a current fleet of 250m vehicles.

Anfavea's econometric calculations were based on the 'motorisation index' versus GDP per capita in 17 countries between 2001 and 2012. The scenario will obviously depend on Brazilian economic policy implemented in coming years.

Anfavea also tried to answer the obvious question of how will it be possible to sell so many cars if large and medium cities face severe traffic congestion. But faster fleet growth is seen in small and medium cities.

Considering new car registrations only, cities with between 5,000 and 10,000 inhabitants saw their fleets grow by 124% between 2007 and 2013. Yet São Paulo, with its 4.5m-plus vehicles fleet, the country’s largest, grew just 6% because, for each 1,000 new registrations, around 800 to 900 vehicles were sold to other areas or scrapped due to age while vehicles were also written off due to accident or theft.

Anfavea suggested city planners should include urban mobility among priorities and switch from planning to action in cities showing fleets growth above the national average. Such plans must consider road planning and public transportation mistakes made in large and medium cities and not repeat them in other locations.

The seminar was told that Shanghai in China did not have any underground rail network in 1990 but now has 350km/220 miles of track while São Paulo, which started on its metro in 1968, has so far built only 74.3 km/46 miles.