Traditional automakers lose space for newcomers

The transformation in the profile of the automobile market in Brazil-for a scenario of greater competition and diversity of brands-deepened last year when, for the first time in history, the concentration of sales in the four most traditional automakers fell to below 70%. Together, Fiat, Volkswagen, General Motors (GM) and Ford accounted for 67.5% of passenger cars and light utility vehicles licensed in 2013, a fall of more than 3 percentage points compared to 70.8% in the previous year.
A decade ago, this slice was 83%, but since then, the four platoon front come ceding space to newcomers marks. The process began in the 1970s with the installation of 90 factories in country French and Japanese groups, such as Renault, Peugeot Citroen, Honda and Mitsubishi. In the last year, gained speed with the onslaught of Toyota and Hyundai in Korean compact segment, which moves the largest volumes.
Until the beginning of the last decade, the Brazilian market was basically played by European and American automakers (see chart below). From then on, the main change in the scenario was the expansion of Asian brands. With the start of local production of cars popular in the second half of 2012, Hyundai's sales almost doubled and 55% in 2013 Toyota grew up, against the fall of 1.5% of all light vehicle industry. At the same time, the Japanese Honda and Nissan also gained space in recent years. Since 2002, the market share of first rose from 1.5% to 3.9%. Nissan, which already at the beginning of the last decade was just coming to the country, closed 2013 with just over 2% of plates issued.
Added together, these percentages will cause a redistribution of the market and leave the Brazil closer to the broadcast setting marks of the United States. There, the big three Detroit automakers-GM, Ford and Chrysler-have 45% of sales and the remainder is distributed among foreign women. Asian automakers already amount to 45.4% of the American market, a group led by Toyota, the largest automaker in the world, which accounts for 14.4 percent of auto sales in the United States-more than 11.5 percent) Chrysler (native.
The Brazil gives signs that may follow a similar path. According to Raphael Gallant, an analyst at consultancy Oikonomia, the trend is that the concentration in the hands of the four traditional brands fall to near 60% over the next five years. "The competition will be even more bitter when all those factories today under construction start to produce," he says.
The wave of Asian investments, which have changed the face of Brazilian automotive market, now enter a new phase with the arrival of Chinese groups. Until early 2015, Chery and JAC Motors-originating from the Asian giant-inaugurate their factories in the country and add together a production capacity of 250 thousand cars per year. Thus, China today is not even 1% of car sales in Brazil, also will become a competitor of weight.
Already in the coming months, Nissan also wins "muscles" with the ripped from his compact factory in Resende (RJ), while Honda opens in two years the second assembly line in São Paulo State, doubling to 240 thousand cars its annual production capacity.
Are investments that add up to other factories with start-up scheduled for the next two years, since automakers already installed-case of Fiat in Pernambuco-the luxury segment's brands, such as BMW, Mercedes-Benz, Audi and Jaguar Land Rover. The evolution of demand that put Brazil among the four largest markets in the world, coupled with government restrictions that prevent the marks to enjoy of this production in the country, without consumption attracts groups.
Waiver of Anfavea, the entity that houses the automakers installed in the country, indicates that ongoing investments, estimated at $ 75.8 billion, will lead the production capacity of the Brazilian auto industry to about 5.7 million vehicles over the next four years. All this productive Park excels in more than 1 million domestic consumption vehicles designed for the period.
The framework points therefore to a greater competition and a market even more sprayed between the brands, especially if demand doesn't recover from the fall recorded last year. The greatest risk to the industry is the possibility of overcapacity, that in a more competitive environment has negative implications on the margins of profitability.
Today, the Brazilian market already is considered quite competitive, where the consumer is available to 62 brands selling 2.6 thousand models and versions. Thus, although still practice prices well above average international, automakers here, some time ago, can no longer pass on escalating costs to the consumer. According to a survey of agency Self-evaluation, car prices charged at dealerships registered deflation of 0.4% in January to November 2013.