Brazil in December 2010: Best Month Ever!!! Nice Ending For Best Year Ever!!!!…Now Wait a Minute…

2010 was the best year ever for the auto industry in Brazil! Controversy as to the exact numbers aside (see comments here). The difference in numbers is due to whether or not you count trucks and other “heavy” commercial vehicles (like buses). Taking into consideration just cars, Bertel’s initial numbers were correct. Brazil grew in 2010 10% and not 11% (just cars, “light” trucks and vans). 361,197 vehicles is the official tally for December 2010 for a grand total of 3,515,120 (consolidating Brazil as the world’s fourth largest car market – in sales) on the year. That’s a whopping 30 percent better than December of last year. Reason to celebrate an extraordinary finish for a very good year considering all the difficulties, right? Well, well-known Brazilian car journo, Joel Leite, writing for Brazilian web giant UOL crashes the party.

In his piece, Mr. Leite informs that in 2010, all, yes all car companies inflated their numbers to try to look better in the final wrap-up. As a result, everybody staid exactly where they were and have been for a number of years (Fiat, number 1; VW runner-up; GM in third; and a full 10 percentage points behind the leaders, Ford comes in fourth). 35 thousand cars (at least) have been licensed to laranjas. In other words, 35 thousand cars have officially found homes though their owners are fictitious and they’re all parked at dealerships all over Brazil. Brazilian shoppers beware! As you go buy a car in January, February or even March next year you could very well be buying a secondhand car!

This practice is not new to the industry. The most flagrant case happened in 2004. A little background history: 2003 was the year all assurances came asunder. That year, after 35 years of market leadership by Volkswagen, Fiat wrangled first place. GM was able to keep its perennial 2nd place. VeeDub do Brasil was humiliated with a 3rd place showing. So in 2004, the year that marked GM’s 80th anniversary in Brazil, GM decided to take 1st place. Though not yet clear, some say Detroit, some say Brazilian GM Prez at the time Ray Young (all by his lonesome); well, someone came up with the ill plan of capturing 1st place. Despite any and all consequences.

So in 2004, by the time December came along, Fiat and GM were straining their necks for what would amount to a photo finish with VW lagging a little behind. GM started the games. VW fell in right along. Fiat’s President at the time Gianni Coda decided not to do it. The same practice of licensing vehicles to supposed owners (the “oranges” mentioned previously) became rampant. It worked. GM took 1st place. Fiat held on to 2nd. VW almost overtook Fiat but had to content itself with 3rd.

The price? Well in January of 2005, GM came in fourth. Behind Ford! They had “pre”-licensed so many cars they couldn’t find new buyers. All they could do was sell the cars left over from 2004. I remember well. In June or July 2005 I was helping a friend buy a car. GM dealers were still hawking cars left over from that dark December 2004!

Let’s see what January 2011 will say about this risky decision. If you see a big dip: Pants on fire!

Final number and market share for 2010

Notes:

Hyundai overtook Toyota, Peugeot and Citroën and is consolidating in 7th and it sells only imported cars! Kia also showed a strong year and leapfrogged Mitsu, Nissan and probably even Mercedes and BMW. Mercedes is again the favorite luxury brand of Brazilians. BMW had that spot for a couple of years and even further back it belonged to Audi. The Stuttgart boys have beaten their rivals for the 3rd straight year.