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Brazil Autos Report Q1 2010Published by: Business Monitor International Published: Nov. 10, 2009 - 60 Pages Table of Contents
AbstractHaving firmly shrugged off the global economic slowdown, Brazil’s automotive market is lookingforward to making a positive start in 2010. In 2009, the market received much required support from theindustrial tax break on vehicles, which not only helped make Brazil one of the best performing markets inthe region, but also restored consumer confidence.However, BMI points out that the impact of the tax break has been unbalanced for the autos industry aspassenger car sales reached record monthly figures, while the commercial vehicle segment reporteddouble-digit declines. Nevertheless, the market’s 8M09 cumulative sales reached 2.93mn units, up 2.73%y-o-y, according to estimates from the Federação Nacional da Distribuição de Veículos Automotores(Fenabrave). Industry experts are speculating that the market could be bracing for record yearly sales by end-2009,while the Associação Nacional dos Fabricantes de Veículos Automotores (Anfavea) expects such a surgeto take the market’s sales up 6.4% year-on-year (y-o-y). BMI is less optimistic however. Despite taking account of the low base effect from 2008 and renewedmarket confidence, we restrict our sales growth forecast to be restricted at close to 3% y-o-y by end-2009,which should be followed by a more impressive 11% surge in 2010. Growth is likely to remain robust forthe rest of the forecast period to 2014 when we expect the market to reach 4.56mn units. Meanwhile, production is likely to stay in line with demand in the long term with total capacity expectedto reach close to 4mn units by 2014. With nearly 2.94mn units expected to be produced by end-2009,down 8.5% y-o-y, the growth highlights the strong growth potential of Brazil’s autos industry. The sheer size of the industry has helped position the country as a leader in BMI’s Business EnvironmentRankings for the autos industry in the Americas. Key factors contributing to this have been its improvedoperating environment and supportive government policies. However, a slew of labour issues have dentedoperations for the likes of General Motors Company (GM), Volkswagen (VW) and Renault, which ifallowed to continue could pose a serious threat to the country’s ratings. VW, Fiat and GM are the market leaders in Brazil’s passenger car segment, while Mercedes-Benz, FordMotor and VW exercise greater control in the commercial vehicle segment. Get Full Details About This Report >> |
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