Latest reports have it that Germany has lost its place as the world’s 4th biggest car market where the spot is now taken by Brazil. This came amidst the growing popularity of Brazil as investors are seeing huge potential there. As reported, for the year ending 2010, some 3.45 million vehicles would have been rolled out in Brazil. The numbers are forecasted by Anfavea, the Brazilian national automobile manufacturers’ association (very much like our MAA).
This means that with a nearly 10% increase of sales compared to 2009, Brazil is now just behind China who tops the list, the United States and Japan. Cledorvino Belini, the president of the association said that the low density of vehicles per inhabitant in the country (at about 1 vehicle per 7 residents) is one of the major attractions for companies to start setting up shop in the Latin American country. The population if Brazil is 192 million and to date there are about 30 million vehicles there.
For car manufacturers, the market in Brazil is attractive because of its growing economy and the potential in vehicle purchase in the near future while they see the Europe and the United States as more saturated markets and hence there might not be that much potential for growth. Belini added that the growth potential is driving a lot of interest from investors and car manufacturers alike where the country also have potential employment supply as well as the material needed.
One of the companies which is looking to expand its operation in Brazil is Fiat who announced that they will be setting up their second factory which is part of the USD5.9billion investment plan for the country from 2011 to 2014. The new factor will cost USD1.8billion to upkeep their current number 1 spot in terms of sales in Brazil. Currently, they hold 23.1% of sales of vehicles there. Volkwsagen is second with a 22.7% sales while at 21.2%, the third best selling company is General Motors from the United States. Hyundai and Chery have also announced their intention and plans to start their operations in Brazil as well.
Brazil is currently the sixth biggest vehicle producer globally where they have produced 17 brands totaling to 3.64 million units which also makes it the biggest market among Latin American countries. According to Anfavea, Brazil’s auto exports go primarily to neighbours Argentina, making up 60% while 20% goes to other countries around its region. With this sort of efforts in place, Germany surely is starting to feel the heat.