Dallas, TX: ReportsandReports announce it will carry Brazil Autos Report Q4 2010 Market Research Report in its Store.
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Report Summary
Supported by the strength of the private consumption and availability of credit for vehicle purchases, Brazil’s auto industry shifted 1.56mn units during H110 – up 9% year-on-year (y-o-y), and closely in line with BMI's forecast of nearly 10% y-o-y growth, to sales of 3.5mn units by the end of 2010. BMI expects growth thereafter to average 9.5% y-o-y, taking the total market to 5.12mn units by the end of 2014. We are mindful of the month-on-month (m-o-m) fall in demand – which has prompted many to believe that the market is cooling down. To that, we see Brazil’s growing reliance on the Chinese demand and an expected slowdown in the latter, as the biggest risk to our forecast.
From the point of view of production, reports of recent labour conflicts and the fact that much of the country’s production capacity has already been used, makes us less optimistic about very strong production growth during the forecast period. After an expected 15% y-o-y growth, to close to 1.7mn units, in 2010 and an average 7% y-o-y growth between 2011 and 2014, we expect Brazil’s total production capacity to reach 4.6mn units by 2014.
Following from this view, we see Mexico as the closest rival to Brazil’s position in BMI’s Business Environment Rankings for the auto industry in the Americas. With a current score of 60.7% (down from 65.5% in the last quarter) in terms of risks, Brazil lags behind Mexico by at least six points – a gap which may be accentuated should labour conflicts continue.
Although an expected slowdown in Brazilian demand will mean that past growth rates will no more be attainable, it will continue to rank Brazil among the most promising markets globally. Therefore, it is not surprising that General Motors Company (GM) expects to sell nearly 1mn vehicles in Brazil by 2014, up from the 600,000 units sold in 2009. Latin America's largest car market accounted for 10% of GM's global sales last year and such is its confidence in the country the firm is looking to spend nearly BRL5bn (US$2.8bn) in Brazil by 2012.
In addition to Brazil's burgeoning middle classes, GM's sales will be helped by the low vehicle ownership rate, which was fewer than 12% of the population in 2009. Help will also come from the popularity of GM's core Chevrolet line-up, for which Brazil is the second largest market in the world after China. The success of the model helped GM corner a 20.4% share of Brazil's passenger car market last year, making it the third most popular carmaker behind Fiat and Volkswagen.
In the commercial vehicle segment, MAN has unveiled trucks in Brazil capable of running on 100% biodiesel (B100) fuel, in a move which could help solidify its lead in Latin America's biggest truck market. BMI believes the German firm's launch of B100 trucks is a well-timed strategy, as it falls in line with the government's aim of promoting the use of biodiesels
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