Brazil has become the world’s fourth largest market for the automobile industry with sales of 3.45 million in 2010, up 9.8% over 2009, and is also attracting massive overseas investments to the industry, reports Anfavea the Brazilian Association of automobile manufacturers.Brazil now stands behind China, United States, Japan and ahead of Germany.
“This is a great attractive for a growing market with gret potential given the low car density per capita”, said Cledorvino Bellini, Anfavea president.
Brazil has an estimated fleet of 30 million cars for a 190 million population, which makes it one in seven, compared to the US and the EU which have reached their maximum percentages.
“Brazil is a market set to keep growing in coming years and this has attracted many investments from the auto industry giants”, said Bellini who is also president of Fiat Brazil that leads the Brazilian market.
“We have competent labour and all the needed inputs for the industry”, which added to the excellent performance of the economy, contained inflation and easy access to consumer credit makes it the perfect deal.
Last week Fiat announced plans to invest 6 billon US dollars in the next four years.
Fiat holds a 23.2% share of the Brazilian market; Volkswagen, 22.73%; General Motors, 21.18% according to the latest data from Anfavea.
The Brazilian auto industry has 17 different brands and is the world’ sixth most important manufacturer.
South Korea’s Hyundai and China’s Chery are the last of a long list of companies that have established in Brazil.
“Brazil is a pole of production and development for Latin America”, underlined Bellini.
Brazilian car exports are mostly absorbed by Latinamerica: Argentina 60% and another 20% in the rest of the continent, according to figures from Anfavea.
As to imports 50% come from Argentina, 22% South Korea and China; 10% from Mexico and 6.5% from the EU and the US.
However Bellini also pointed out the growing difficulty faced by the local industry to sell overseas because of the strong Brazilian currency, Real vis-à-vis the US dollar.
“We are feeling the difficulties to compete overseas and on the other side imports have increased considerably”.
Nevertheless Brazil has retaken exports vigorously and should be selling overseas 780.000 units which represent an increase of 64% over 2009, said Anfavea.