Hoovey689

iTrader: (16)

Brazil becoming a major world market for automakers... again

If your image of Brazil has anything to do with "The Girl from Ipanema" played by 1,001 Strings, you may be a little out of date. The country that will host the 2016 Summer Olympics has come a long way since the dawn of the bossa nova craze a half century ago, though it still has plenty of nagging problems left to deal with.

The recent Sao Paulo Auto Show provided one clear clue as to how much things have changed in recent years. When I first visited Brazil 15 years ago, the vehicles available to Brazilian motorists were, for the most part, decades out of date – common practice among automakers like Ford, Volkswagen and General Motors, who would dump generations-old tooling into these backwater markets rather than anything close to new.

Today, however, Brazilians motorists are likely to get the latest and greatest. Indeed, October's Sao Paulo show gave local buyers – and the rest of the world – a look at a number of all-new offerings, some designed specifically for the Portugese-speaking nations, others for global markets, such as the next-generation Ford Fiesta sedan. Significantly, the new model will land in Brazilian showrooms well before it reaches dealers here in the States.

No surprise. Brazil is now the world's fourth-largest national automotive market and has "tremendous potential for the future," says Ian Robertson, the BMW AG board member overseeing global sales and marketing. With sales up 54 percent in just the past year, it's probably no surprise the automaker has decided to invest in a new assembly plant in the affluent southern state of Santa Catarina.

That facility will open about the same time as the first Brazilian plant for Nissan, this one closer to the beaches of Rio. The Japanese maker had been exporting cars to South America's largest country from factories in Mexico, but sales have grown so fast it is betting local production will be the only way to keep up.

"We made a late start here, but we want to show we are serious," explained the Japanese automaker's global styling chief, Shiro Nakamura, as he pulled the covers off the Nissan Extrem concept vehicle. "Success in Brazil," he emphasized, "is vital to our plans for global growth."

Meanwhile, General Motors, one of the first foreign makers to invest in Brazil, is rapidly ramping up its operations, CEO Dan Akerson conceding the company had "underinvested" for too long. The maker's local boss of GM Brazil, CEO Grace Lieblien, expects sales "to top four million units by 2015 or sooner." That could position Brazil as the world's third-largest national market, behind China and the United States.

That doesn't mean success is guaranteed. As anyone familiar with bossa nova or samba music knows, there's a melancholy, almost fatalistic streak that runs through the Brazilian psyche. A frequent joke among the business community is that "Brazil is the economy of the future – and always will be."

There's reason for such caution. For any number of reasons, the economy long resembled a roller-coaster, with massive booms followed by deep troughs, often accompanied by devastating inflation. A huge automotive growth spurt in the late 1980s encouraged foreign makers to plan an estimated $20 billion in factory investments. Many pulled out, just a couple years later, when the market tanked.

But recent years have seen an unprecedented level of growth and stability – to some, ironically so, as it was carefully managed by Pres. Luiz Inacio Lula da Silva, a former union boss, and maintained by his hand-picked successor.

Brazil has always sambaed to its own rules. The automotive market began to grow with the creation of the so-called Popular Car segment. Until then, motor vehicles were the purview of the wealthy. But suddenly, tax breaks and cost cuts on stripped-down models like the original VW Beetle made it possible for the small middle class to get on wheels. Today, the middle class is growing quicker than anywhere in the world but China and, perhaps, India, and they're buying cars at a record pace.

The other curious fact about Brazil is that it's one market where consumers take renewable energy quite seriously – the government putting an emphasis on ethanol derived from abundant sugar cane crops to minimize dependence upon foreign oil.

Despite the newfound optimism, that streak of caution, even pessimism, hasn't entirely vanished. Many Brazilians still fear the economy will eventually return to its old roller-coaster pattern. More immediately, auto executives are fretting that the government will soon eliminate incentives that have given a big boost to demand. But there are few who take seriously the likelihood of anything more than a minor setback. For most, the future has finally arrived.

http://www.autoblog.com/2012/11/06/b...omakers-again/

Lil4X

Looks like Brazil's Troller, recently acquired by Ford borrows a good deal from the original Bronco concept. With a large helping of machismo styling, it looks like a Hummer that went to finishing school.



At last week's Sao Paulo Auto Show, Troller bowed its TR-X, with a 4-cyl turbo-diesel and serious off-road capabilities. Troller, it seems is a major producer of off-road vehicles in Brazil, so it's not just a lifted boulevardier with Dakar pretensions, it's the real thing. I like!

I think I know where Ford shipped all that 1970's pukey-green paint they had left over.

More at: http://www.foxnews.com/leisure/2012/...tcmp=obnetwork

Hoovey689

iTrader: (16)

Troller is pretty cool. Gah I wish Ford would build the Bronco again

LexFather

The import taxes are insane there...doubling the price of cars....but yes a huge growing market for many industries.

Lil4X

Dad worked in Buenos Aries several months of the year for several years in the sixties, helping commission a pipe plant. American cars were all the rage, but they were insanely expensive, thanks to the import duties imposed by Argentina. Brazil was only slightly less greedy. We figured a new 1963 Ford Galaxy that sold for about $2,900 in the US, would go for over $24,000 in Buenos Aries. As you can imagine there was a huge market in crates of "tractor parts" that were shipped down there and new American cars were quickly re-assembled, sold and were literally on the streets within hours of being off-loaded at the port. Wherever there is a profit to be made, someone will come along and fill the need. We never could figure how to fund a smuggling enterprise, but obviously a lot of people did.

As recently as a couple years ago one of my clients' offices in Sao Paulo had to purchase a local fiberglass and plastics company. Brazil has insisted for years that a certain percentage (now over 50%) of imported technical products be "sourced in country" and the only way to get sufficient local content into their product, they literally had to manufacture it in Brazil. If you manufacture fiberglass pipe, it's a one-piece product. The content of the product going off the loading dock is either 0% or 100% Brazilian. There are no "parts" that can be locally sourced. In that case, as an American manufacturer, you're kinda stuck.

Another client had to modify a large drilling machine to take 1200 hp DC electric motors - Panasonic was building similar motors in Brazil, for railroads and industrial machinery. They were acceptable to the local authorities, and that was all that mattered. It didn't matter that its face mount and bolting pattern was entirely different from GE or EMD . . . if we wanted to do business down there, we shut up and sent them what they asked for, even if it meant manufacturing entirely different gearboxes for the Brazilian market. Of course you KNOW it cost the buyers, but that didn't seem to matter.