Brazil in August 2010: Tudo Azul

Contrary to English, “azul” or blue has positive connotations in Portuguese (yes Brazilians speak Portuguese not Spanish – close, but no potatoes). “Tudo azul” means everything is fine, the road is clear. Maybe a close equivalent would be that line in that old song, nothing but blue sky. According to the giant Brazilian web providers UOL’s site, August has again recorded record car sales in Brazil. The market was up 3.99 percent on the month (good for a total of more than 296 thousand), but better yet, it was up 19.82 percent on August of 2009. Year-to-date, the market is up an even more impressive 27.68 percent!

As you’ve been reading my columns, you all know we’ve been watching closely the Gol versus Uno fight for first place. Can you guess who came out on top?

The Gol. The 23 year old champ is still hanging on. For the year, the Gol leads by 10,000 units, with the Uno in 2nd. In July, that advantage was down to 2,300 cars. In August, the Uno narrowed that down to just 1,761 cars. Will next month be the month?

Brazil’s Best Selling Cars (numbers courtesy of UOL)

Big loser: Fiat Siena losing 4 positions and almost 3 thousand sales. Fiat models all lost slightly (friendly-fire, blue-on-blue?). VW models all gained very little in sales. Ford’s Fiesta gained a position and Chevy’s Corsa Sedan rose well while Celta fell a little. The Celta though was able to snatch the 3rd position in annual sales from the Palio. Will the Volks Fox/Crossfox do the same next month?

As to the Uno X Gol drama, the VW is sitting pretty still, while the Uno is still gaining sales.

Top 10 Brazilian Car Makers Ranked by Sales and Market Share (numbers courtesy of UOL)

Comments: This month was back to normal. Hyundai lost another position (to Peugeot) and should it lose again next month, it’ll go back to its usual place behind Toyota. It could well happen, but I wouldn’t count on it. What’s hampering them are their strong sales abroad. A relatively small operation like Brazil takes a back seat to other, more important markets. What I know though is that any ix35 or i30 that shows up at dealers gets immediately bought. It may be that they, too, have been victims of friendly-fire as Kia’s Soul (among others) has also been in strong demand.

Everybody gained this month (in sales), though all the Big 4 lost market share. Fiat was the big loser this month (more on that below). It lost almost a full percentage point in a market up by 19 percent. Surprisingly, Renault was the biggest winner with almost 25 percent more sales. Sign that Brazilians are warming up to the charm (and basic competence) of the New Logan? Sadly for them, not. Renault was unusually aggressive this month in terms of pricing and its Sandero model found itself in 11th place. Had it broken into the top 10 it would have been the first ever Renault do Brasil model to do so.

So to sum up, big loser Fiat. Just wait a minute now. This was the result of everybody else dropping their prices for fear of the new Uno. Fiat this month didn’t do any of that. It lost some sales, but their margins were probably better than everyone else’s. They didn’t promote the Palio, for example, by offering crazy prices like last month. Only the Siena (Palio derived sedan) showed signs of weakness. Think again, this month they were busy converting the Siena to the new E.torQ line of motors. So, less of them were on the lots. Expect Fiat to pull ahead next month yet again.