Brazil is consolidated as the fourth car market

Favored by combination of crisis in Europe and domestic sales record, Brazil is consolidating this year as the fourth-largest automotive market in the world, distancing himself from Germany and shortening the distance, still considerable in relation to Japan, placed third, but where sales are on the decline due to the withdrawal of stimulus data for the purchase of cars after the tsunami that hit the country in March 2011.
The Germany, who three years ago lost fourth place to Brazil, got even further behind in the race of the largest global markets after registering 6.8% drop in sales of vehicles in the first seven months of this year. The difference of Brazilian demand-that rose nearly 3% in that period-in relation to 215 thousand of German vehicles, including trucks and buses.
Other markets that could threaten the position of Brazil, such as Russia and India-where car sales yield, respectively, 6.2% and 9.5%-are also falling, which makes it even more comfortable the Brazilian situation in this ranking.
Brazilian demand, rising almost 3 percent this year, already surpasses the German in more than 215 thousand vehicles
The rise of Brazil between the large markets of the automotive world is a relatively recent phenomenon, being a result of successive records on the consumption of vehicles over the last ten years. Until 2006, the country was the ninth largest world market, with sales of cars that amounted to only half of the current volumes. Since then, consumption has evolved to an average annual rate of more than 11%, reflecting, primarily, the increased availability of credit, the expansion of income and tax incentives granted by the Government in times of crisis.
Automakers that were already positioned here with local production might make this move to ease the turbulence experienced by its headquarters in the United States and in Europe, especially after the financial crisis of 2008. The Brazil has become the third largest market in the world for groups such as Volkswagen, General Motors (GM), Ford and Renault, or the second largest for the Fiat when it includes Chrysler's sales.
Published studies by consultants, which includes a survey by KPMG with executives of the largest automobile companies in the world, came to design the Brazil as the third largest global market, surpassing Japan until 2016.
The international role of the consumption of cars in Brazil, however, does not repeat when looking at the activity of automakers. Although it has the fourth-largest market, Brazil is only the seventh largest producer of vehicles in the world-with, according to numbers from last year, 1.2 million units less than Korea, that isn't even being among the ten largest world markets.
Although it's closer in car consumption, Brazil is not enough to have half the Japanese production. In 2012, the Japan manufactured almost 10 million vehicles, while the volume of Brazil was 3.4 million units, according to data compiled in Yearbook of Anfavea, the entity representing the Brazilian automotive industry. In comparison with Germany, the Brazilian production is lower than in more than 2 million units.
The difference for these countries is that Brazil does not yet have an exporting industry, as well as genuinely national brands haven't developed with projection abroad. The Japan, for example, exported, in 2012, 4.8 million vehicles-almost eleven times above the Brazilian shipments-and its automakers have 168 factories scattered throughout the world.
In Brazil, without competitiveness to achieve more developed markets, exports are too concentrated in South American countries. "We have a production capacity that is the desire of large industrialized countries, but we need to reclaim our ability to compete," said Rogelio Golfarb, Vice-President of Ford in Brazil.
At the moment, the Anfavea works in a set of proposals to be presented to the Government to encourage foreign sales. The text should include measures such as exemption of exports. The goal outlined by the entity is up to 1 million vehicles--double the current volume-exports of vehicles produced in Brazil, retrieving the trade surplus in the sector.
Automakers evaluate that the resumption of exports will be critical to avoid idle capacity in the industry, since the ongoing investment must increase the annual production capacity of the Brazilian auto industry in more than 1 million vehicles until 2017. With the restrictions on imported products of the new automotive system, local production became the only way to have high-scale sales in Brazil. Therefore, a number of automakers have announced projects to install factories in the country.