The Truth About Cars » Brazil The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Thu, 24 Jul 2014 17:47:59 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Brazil Dispatches Do Brasil: No Way, It’s The Palio Way! Wed, 14 May 2014 11:00:30 +0000 Fiat-Palio-Way-01-560x373

As I mentioned in my recent analysis of FCA’s plans for Brazil, Fiat is chugging along at almost full capacity and doesn’t really need new cars to compete here. However, that doesn’t mean they will quit fiddling with their product line. Behold the latest and greatest in South America: Fiat’s adventurous new Palio Fire Way!

According to Brazilian enthusiast site, the latest Fiat to sport the trappings of the very successful aventureiro idea is the the Palio Fire. Launched way back in 1996, the bonesof the car has remained untouched, while the front and back have been redesigned (Giorgetto Giugiaro penned this version) and the mechanicals have been completely overhauled. With a ride height 15 mm taller than the regular version, what else does the new Palio offer consumers for the price of 27,860 reais (about 4,000 more than the regular)?

They get some “fancy” decals, plastic cladding on the wheel openings, plastic protection on the bottom of bumpers, plastic side mirror covers and plastic hubcaps. Lots of plastic. Besides that they get a tachometer and (very slightly) better seat fabrics and blacked out headlights.

The Palio Fire Way comes with the same equipment as the regular version, like the now mandatory dual frontal airbags and ABS, and – wait for it – internal manual controls for the side mirrors and clock.  Air conditioning, power steering, windows and locks, alloy wheels, more airbags, really anything that’s worth having, is an option and costs high dollars to get.

The Palio Fire isn’t a complete crapcan. It actually gives you a soft, compliant ride, seating for five is tight but possible, the trunk will hold a week’s worth of groceries or the luggage of a small family on vacations. The 1.0 engine puts out 70-ish horses and sounds pretty good doing so and is responsive. Fuel economy is not bad.

Finally, Brazil is a very large country with miles of back roads, unpaved roads, broken roads. For those out in the country and who can’t pay for a pickup or need a car to take the family along, the extra height is quite useful. Even in Brazilian cities, some see benefits in the extra ride height as it helps in overcoming the numerous potholes, speed bumps, unbelievably deep gutters so prevalent in Brazilian cities.

This is the kind of car Brazilians can expect to see over the course of the next couple of years. Cars that been selling for more than a while and will continue to do so, aided by the cosmetic touches Fiat is so good at. Real new cars? You’ll have to wait until 2016.

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Dispatches Do Brasil: FCA’s Plans For Latin America Fri, 09 May 2014 16:40:23 +0000 FiatBrazil

After all was said and done and the dust settled on FCA’s presentation of future plans to investors a couple of days ago, many of us were still left wondering – what does FCA really have in store for Brazil? We all know what the “F” in FCA stands for and there’s a reason why it comes before the “C”. Part of that is the success Fiat has enjoyed in Brazil – which was heavily emphasized in the Fiat brand presentation. Brazil is a good indicator for Fiat’s plans in the Latin American market, and the rest of the globe.

This year, Fiat is doing well, even though Brazil is in a down market this year (Fiat is down about 5 percent). 2013 saw Fiat sell 785,000 cars – impressive given that its domestic production capacity is 800,000 units. Fiat will add another 400,000 units of capacity over the next few years, betting heavily on Brazil as a major engine of growth.

So what did FCA CEO Sergio Marchionne say about Brazil? No new nothing for brasileiros until 2016, when the new factory will kick off production of the new “City” car directly aimed at Volkswagen’s up!. More than likely, it will sport a 900cc two-cylinder engine that can add forced induction, producing 70 to 130 hp while keeping consumption (and emissions) to a minimum.

Besides that, baby Jeeps and Jeeps labeled as Fiat products will also come out of that new factory (4 new models, initially).These new CUVs will sit directly in the meat of the fastest growing segment in the world. Aside from giving Fiat more product, it’s an important step for the internationalization of the Jeep brand.

At the old factory in Betim, Minas Gerais, Fiat will phase out the venerable 178 series of cars, while the new Palio and Grand Siena line will sit on top a version of the platform underpinning the current Brazilian Punto. The new Uno that sits on the 326 platform, an evolution of the old 178, will move up to hybridized version of  326, and the Punto’s platform. The Strada pickup will survive, but its final form is unknown.

As the new European Punto will sit on the same platform as the future 500, Fiat Brazil is at a loss as to what to do with the Linea and Idea. That means that the Punto is, as we say in Portuguese, subiu no telhado (about to jump of the roof). The Viaggio and Ottimo (Fiat’s version of the Dart) also have unclear futures in Brazil. Both were supposed to arrive, but they have been delayed indefinitely.

Part of the reason is that, Fiat Brazil is now a smaller player in the global FCA realm, and must now compete with Chrysler for money. The slowdown of Fiat’s factory expansions in Brazil is evidence of this. However, the contracting car market does help Fiat. As they are operating at among the highest capacities in Brazil, the no launch of new cars is, at the moment, a welcome and lucky break. The current models are very competitive and are doing well in the market. Any new cars might just push the limits of Fiat’s capacity in South America too far.

The Uno, which is the cheapest car in Brazil has just got some “awesome” decorative fluff-ware, enough to keep interest, in the media and public, and keep the old factory chugging along until 2016. Then,Fiat will be ready for action and hungry to get the 1 million plus sales they need down here in order to prove signore Marchionne is right, and that FCA not only has a future, but a bright one at that

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Dispatches do Brasil: Law, Society, Media and Fires. Consumers Are Just Dust in the Wind Wed, 19 Mar 2014 19:58:34 +0000 tipo-fire

The year was 1995. The country: Brazil. A new Constitution had been proclaimed a few years before, and our fledgling democracy had survived a presidential impeachment. Society was growing up and demanding new, more transparent relations with big business. The car market was more open than it had been since the 1950′s,  and due to the deluge of imported cars, that brief window would soon close. I was there, in the eye of a hurricane, looking to buy my very first car with my own money. All those factors made up the perfect storm, which conspired to pull me away from the car of my dreams.

That car was the Fiat Tipo. Due to the economic shock tactics of the now-impeached President, Fiat imported it to Brazil by the boatload and it even became the sales leader for a month or two in 1995, the only time an import has ever topped the charts in Brazil. Offering great looks, lots of space, generous features list, a very sporty and comfortable ride, and, perhaps more importantly, a price that undercut the competition, the Tipo was the hottest car at the time. It had everything one could want, and seemed destined to become the most sold car that year and the foreseeable future. Then, disaster struck. Tipos were self-immolating at alarming rates, all over Brazil.

Click here to view the embedded video.

Taking advantage of the new possibilities the Constitution and a brand-new Code of Consumers’ Protection and Defensean association of owners was created (AVITIPO – Association of Tipo Victims). The mainstream media took it up with a vengance. As it was, a new type of collective lawsuit demanding reparations of civil responsibilities, made possible by the Constitution and the new Code, was to be tested. Anyone who had a Tipo that had caught fire, irrespective of joining the association, would be entitled to moral and material damage from Fiat, if the Italian company was found guilty.

Click here to view the embedded video.

Fanning the flames of the growing fire, Fiat fought it. They had not perceived the Brazilian world they were working in had changed as evidenced by the new Constitutional and Consumer Code dispositions. They did not anticipate that the media would make this the litmus test of the new Brazil that had come out of a painful process of re-establishing liberal democracy. At first, they dragged their feet. They claimed there was no problem with the car. After a couple of months, with the pressure mounting and sales plummeting, they finally acknowledged some responsibility. However, Fiat could not have been more inept. They blamed consumers, saying that the fires were the result of the habit of some consumers of washing their engines with kerosene, which would affect the cardboard lining of the “hot air convergent tube”.

Click here to view the embedded video.

That did it. Societal fire around the case reached feverish levels. AVITIPO proved in the courts and, perhaps more importantly, in the court of public opinion, that Fiat had given the wrong solution to the problem. Association pundits proved that the fires were the result of a hydraulic power steering hose not coping with the pressure in the system when the wheel was at full lock in situatiosn like maneuvering into a tight parking spot. In this situation, a hose would come loose, and fluid would drip into the engine compartment, eventually reaching the beginning of the exhaust system under the engine and, voilà, a fire would ignite.

Brazilian consumers watched the drama in awe and disgust. Awe that consumers’ rights were effectively being imposed on unwilling big business and that the new Constitution had effectively given them new rights and powers against even the biggest corporations. They were also disgusted that such a big company could have been so incompetent as to not find the problem and so resistant to the new mores.

Fiat eventually recanted and recalled the cars to change the defective hose. It lost in the courts too, though they took the fight all the way to the Supreme Court. Consumers patted themselves on the back, as did the press, which delighted in its new role of the knight in shining armor for consumers. New legislation was put in place making the mandated recalls easier. Some companies, aware of the public relations fiasco, did indeed become more transparent and would not fight consumers as harshly.

Me? I never got the Tipo. Afraid of the fires, unsure as to what to do, in the middle of the howling winds of this perfect storm, I bought another kind of Fiat, an Uno, and was very happy with it. The whole situation made me realize how small we are in the whole process and how we go back and forth, mere pawns in the big money game.

I lost an opportunity to get the Tipo (a new situation would present itself a couple of years later) and regretted it. In the end, the solution was found, roughly 100 cars burned and owners were compensated. In its 4 year Brazilian career, Fiat sold more than 180,000 imported Tipos. Around 150,000 in its first two years. After the start of the melée, the last two years saw only 30,000 find their way into consumers’ hands.

In 1997, the Tipo went out with a whimper. I wince when I think of the car that got away from me.

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Dispatches do Brasil: A Brief History Of The Ford Ka Mon, 27 Jan 2014 14:00:58 +0000 newkafront

The rumors have it that the new Ford Ka will be on sale as of March this year. Production of the old Ka has come to a close as the Zetec Rocam engines have also been terminated (and thus the old Brazil-market Fiesta is probably dead as well). At launch, the new Ka will come exclusively with a 1.5 Sigma engine and a 1.0, three cylinder, EcoBoost-based engine. Rumors have it that it will be the most powerful 1.0 engine in Brazil and will thus have to provide around 82 ponies.

Pictures shown on a Brazilian news site,, show the new Ka in factory plates along a new Fiesta on what the site called final homologation tests. The new Ka sits on the same global platform (called B) as its brother. Reports suggest the new Ka will be as long as the Fiesta, but higher and roomier than its sibling. However, it will be cheaper, though more expensive than the current Ka, at least initially. A sedan version is also in the works, and spy pictures have been taken of it in Michigan by our own Ronnie Schreiber. The Ka sedan could end up using the Escort name in Latin America.

The new Ka is part of the One Ford strategy, though in an ancillary fashion. Initially, it will be produced in Brazil, India and China. Ford of Germany however had extensive participation in the car’s development, and if the car proves successful, it could eventually find its way into Western Europe.

In Brazil, the car was launched in 1997, just six months after Europe. In Brazil, it used two variants of the Kent engine, a 1.3 and a 1.0. With the bigger engine the Ka topped out at 155 km/h while the smaller unit took a hair under 20 seconds to get to 100 km/h.  As in other countries, the design provoked a love-hate relationship to the car and left few indifferent. One of the difficulties this car faced was that it was truly and legally a four seater. The 185L trunk was also considerably smaller than the competitors. In a country were compacts are often used as family cars, it was never the biggest seller, but did appeal to those who understood its style and enjoyed an honest to God, fun car to drive.

In 2000 the old Kent engines were done away with and the car got the new 1.6 and 1.0 Zetec Rocam engines. The larger engine now sported 96 hp and could get to 100 km/h in just over 10 seconds, making it a veritable pocket rocket. The 1.0 got a bump to a whopping 65 horsepower – competitive for its class.

In 2002, the first major redesign. Exclusive for Brazil, it changed the front slightly and the back became much more attractive (to most anyway) with the addition of bigger lights and wrap around glass. In this way, the separation between the Latin American and the European Ka became official and they were never again the same.

Following its own trajectory in Brazil, Ford completely redid the Ka for 2008. The Ka grew by nearly 8 inches, got a bigger trunk and could now seat 5 passengers. This new design proved a hit with Brazilians and sales took off again. Though this was mainly credited to the new design, the fact of the matter was that Ford had cheapened the car out. The interior was now made of much meaner material and mechanically it was simplified. It lost the front sway bar, the frontal sub-frame, springs were hardened to compensate, in short, the car lost the magic that had made it a true driver’s car. It was now the cheapest car in Brazil.

In 2012, the final curtain call came for the Ka. It received a new front and Ford changed the backlights. As Ford launched the new Fiesta in Brazil, the old-gen Fiesta, now rebaptized Fiesta Rocam, was downgraded and became cheaper. When the 50 month financing (standard in Brazil) was taken into account, the Fiesta Rocam was marginally more expensive than the Ka and offered four doors and more space.

Now Ford hopes the new Ka will have what it takes to battle it out at the 30 thousand real mark. That means it has left the bottom rung of the market and will have to hold its own against heavy hitters like the perennial best seller Volkswagen Gol, Fiat Palio, Chevy Onix, Hyundai HB 20, Toyota Etios among others. The new Fiesta has been a hit in Brazil, taking the Fiesta nameplate to unheard of heights in the Brazilian market. If the new Ka takes permanent residence among the top 10 sold, Ford could find itself inching closer to the real big three in the Brazilian market (Fiat, GM and VW) and not having to worry about being overtaken by upstarts like Renault and Hyundai who have been challenging Ford’s , by now traditional, fourth place in Brazil.


ka2008 ka2008back ka2008interior ka2010 kabrazilianback kavelhointerior newkaback newkafront newkasedan newnewkaback ]]> 20
Jeep Aiming For 1 Million Units Sold in 2014 Thu, 16 Jan 2014 17:05:39 +0000 2014-Jeep-Cherokee-front-closeup-1024x640

Chrysler Group LLC CEO Sergio Marchionne threw down the gauntlet for Jeep during an interview on Detroit’s WJR-AM at the 2014 Detroit Auto Show, proclaiming that the Rubicon-rated brand will move 1 million units onto the trails and highways by the end of this year.

Global sales of the iconic off-road brand rose 4 percent in 2013 for the fourth consecutive year, topping out at a record 731,565 units moved. Though Marchionne is confident Jeep will make his stated sales goal, brand president Mike Manley is taking a more conservative stand, stating that the figure might come by 2015 rather than 2014.

However, Manley believes the new Cherokee could bring the remaining 300,000 or so units to the table by the end of the year should the SUV do well at home and abroad. Sales of the Cherokee in the United States, in spite of its face, are 15 percent to 20 percent ahead of Chrysler’s expectations after only two months in the market; total U.S. sales account for 67 percent of Jeep’s overall global sales.

As far as the rest of the world is concerned, Fiat has plans to build a subcompact Jeep in Italy for sale in Europe in 2014, with arrival in the U.S. due sometime in 2015. The parent automaker also plans to expand production in America, as well as in China and Brazil.

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New Face of 2015 Ford Focus Revealed Mon, 06 Jan 2014 15:07:00 +0000 2015 Ford Focus

Three years ago, Ford unveiled the third-generation Focus to the excitement of American enthusiasts who thought the second-generation model lacked “zazz,” to say the least. Come 2015, the Focus will have a new face, and that’s only the beginning.

Debuting at the Geneva Auto Show in March, the 2015 Focus not only has a new, more Aston-Martinesque mouth — bringing it in line with the Fiesta and Fusion — but also a reshaped hood, front spoiler, and rear bumper. Inside, the “mobile phone”-inspired morass of buttons on the current model will soon be replaced by a more sensible, conventional layout featuring updated climate controls.

For the big gun of the collection, the Focus ST is expected to have more aggressive bodywork than the rest of the Focus lineup, along with improvements to the suspension and steering for sharper handling.

Under the hood, however, engine options will be carried-over into the 2015 model year, ranging from the 1-liter EcoBoost pumping out a minimum of 98 horsepower at the low-end, to the 247-horsepower 2-liter monster under the ST. Russian, Chinese and Brazilian markets will see 1.5-liter gasoline and diesel compliance engines as part of their engine choices.

Green enthusiasts will be pleased to know that plug-in variant (in the vein of the C-Max Energi) is in the offing; thus, expect a similar total output of 192 horsepower from its combined electric/gasoline power with 20 miles of electric-only travel. The all-electric Focus will still be available, as well.

The price of admission should more or less hold for 2015, so expect to pay anywhere from around $17,000 to $35,000 depending on model of choice

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Hyundai, Kia See Weakest Annual Sales Growth in a Decade Thu, 02 Jan 2014 16:59:53 +0000 kia-k900-la-auto-show-14

2014 may only be a day old, but it’s already shaping up to be a rough year for Hyundai and Kia as they prepare to increase global sales by just 4 percent this year, the lowest and bleakest forecast for the Korean duo since 2003.

Though the foreseen growth will be fueled by revamped models and increased production in China, and is in line with overall projected global sales in 2014, a stronger won and weaker yen — the latter brought about by Japan’s desire to support its export industry and to find a way out of the 20-year trek through the economic wilderness — have eroded the price advantage Hyundai and Kia held over their Japanese competitors.

While the duo experienced market growth in Brazil and China last year, they lost market share in both their home market and in the United States, the former through a free trade pact between the European Union and South Korea. Sales in 2013 totaled 7.56 million units worldwide, with a total projection of 7.86 million going forward in 2014.

Shares of the parent automaker haven’t fared well in the outgoing year, advancing only 8 percent against GM’s 41 percent and Toyota’s 60 percent surges on the trading floor.

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Akio Toyoda Sees Emerging Markets’ Growth Slowing, Uncertainties in China, Japan Thu, 02 Jan 2014 13:00:58 +0000 TOYOTA/

Bloomberg is reporting that Akio Toyoda, president of Toyota Motor Corp. and scion of its founding family said that a slowdown in emerging markets and uncertainty over demand in both China and the Japanese home market makes 2014 “unpredictable”.

While the weaker yen increased earnings for Japanese exporters, those profits are being offset by slowing demand in India, Thailand, Brazil, and Russia. Japanese automakers also continue to face a potential repeat of Chinese consumers rejecting their products, as happened last year as tensions between those countries’ governments increased over who owns a group of Islands under dispute.

“It may be impossible” to shield against tensions between the two countries, Toyoda had told reporters earlier in December. “But we will work to minimize the impact.”

Slowing sales in emerging markets caused Honda Motor Co. to miss analysts’ forecasts for its first-half earnings this year. Nissan Motor Co., which is looking to make Mexico a hub for exports, reduced projected full-year earnings by 15 percent to reflect slower than anticipated sales in the developing world.

Toyota’s own operating profits were down in Asia, excepting Japan, in the third quarter, as Thailand ended government incentives for first-time car purchases. Akio Toyoda was pessimistic about Japan as well because of that country’s planned increase in the national sales tax rate from 5% to 8%. The Toyota president said, on behalf of JAMA, that automakers would like to see a stable yen since production cannot be shifted around the world as quickly as currency values change. The Japanese currency is currently at a five year low against the American dollar.

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Brazil Will End Tax Breaks On New Cars Thu, 26 Dec 2013 15:33:37 +0000 Brazil's government has announced that it will gradually end the rollback on manufactured goods taxes

Brazil’s government has announced that it will gradually end the rollback on taxes on manufactured goods including cars.

On Tuesday, the Brazilian government said that tax breaks on cars will be slowly rolled back next year, according to a report by Reuters. The government has to make up for billions in lost revenue that has harmed Brazil’s finances this year and had previously announced that it was going to revive the industrial products tax, known as IPI, charged on cars and other manufactured goods. Though many analysts expected an immediate return to the former 7% tax on new cars, the government decided to phase the taxes in gradually, starting with an increase in January from 2% to 3%.

Deputy Finance Minister Dyogo de Oliveira told reporters that the government will analyze results in the middle of next year to see if a return to the original 7% rate will be needed, based on market conditions at that time.  Last year the IPI was lowered on cars, furniture and appliances in an effort to boost economic activity. The announced increase in the IPI will mean almost a half billion dollars of additional government revenue for the first half of 2014.

Brazil is currently the fourth largest automotive market int he world and companies doing business there worry that the increased tax and new mandatory safety standards will reduce sales. Sales this year are already likely to be down for the first time in 10 years. Tighter credit and the government winding down its stimulus program are blamed.

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Brazil Imposes New Safety Standards As Consumers Fork Out More, While VW Gets A Pass Thu, 19 Dec 2013 12:30:51 +0000 Brazilian_Kombi_pair

The Brazilian auto industry has been on edge for a week and a half, as the Economic Ministry announced that the mandate for airbags and ABS on all Brazilian cars in 2014 was “under review”. Citing worries over inflation (as car prices make up an infinitesimal part of that complex calculation) and the fact that auto sales were down, the Economic Ministry said that the 2014 adoption of the aforementioned equipment might not be in Brazil’s best interest.

According to industry sources, the government expressed worries that the measure would increase vehicle prices anywhere between 1,000 and 1,500 reais per car.  In turn, the OEMs put pressure on their suppliers to lower costs, so that the OEMs could maintain a healthy profit margin while keeping the price increase to around 500 reais, allowing them to adopt a posture that showed them as both safety oriented and caring about the consumer.

Although the safety mandate passed, an exemption was granted for the VW Kombi, which will remain in production.The Kombi is still made by hand in Brazil, and our sources tell us that they are among the highest paid auto workers in Brazil, and highly protected by the auto worker unions. In addition, the Komni’s precarious existence means VW is reluctant to train anyone to build the Kombi – they just keep the old timers around instead.

As late as a month ago, it appeared that the Kombi was finally set to die, and VW launched a final edition that cost 85,000 reais (roughly, $37,000), a sum VW happily pocketed. Now, with this announcement, VW can keep on making the Kombi, at estimated profit margins of around 80 percent.

The end result is more profit for the OEMs, and good PR for both the unions and the government. On the other hand, Brazilian consumers get the raw end of the deal.


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New Jaguar Land Rover Factory in Brazil to Open in 2016 Wed, 11 Dec 2013 11:30:32 +0000 2013 Land Rover Range Rover Evoque, Exterior, Rear 3/4, Picture Courtesy of Alex L. Dykes

If you live in Brazil and are pining away for a Jaguar or Land Rover, Tata Motors will open a factory for the luxury marques in time for the 2016 Summer Olympics.

The new factory, slated to produce 24,000 units annually at the beginning, is set to begin construction in Itatiaia sometime next year. The two luxury brands already hold 53 percent of the luxury SUV market in Brazil, with a goal to sell 10,000 units in 2014; 9,549 Evoques, Freelanders, Discoverys et al have left the showroom through October 2013.

Tata will use the new factory to meet local demand before considering export markets nearby, and is considered to be a major step in their overall global manufacturing strategy.

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Ford Ka Concept Developed & Debuted in Brazil, Will Likely Start Production Next Year Thu, 14 Nov 2013 15:02:30 +0000 ford-figo-next-gen-2015-concept-2

The importance of South America to Ford Motor Company’s plans can be seen from the fact that chairman Bill Ford went to Brazil to introduce the Ka Concept, an entry level hatchback for urban consumers in Brazil and other global markets, particularly developing countries. FoMoCo says that the car was developed by Ford Brazil. Of course, the Ka Concept is a concept car in name only and when the production Ka arrives next year it should be very close to what was revealed this week. It’s also very similar to the small sedan whose spy shots TTAC featured recently that our sources tell us will be the Ka sedan.

Speaking at a ceremony at Ford’s Northeast Industrial Complex in Camaçari, Bill Ford said, “Ford has a long history in Brazil, bringing development, jobs and growth to the region. As an integral part of our global growth strategy, we are committed to bringing world-class products to Brazil and to helping the region create global vehicles for the rest of the world.”

Ford expects global demand for sub-B segment vehicles to grow to 6.2 million units by 2017, an increase of 35%, outpacing the expected overall industry growth rate by 12 percent.


“The Ford Ka Concept is aimed at customers in growth markets who want and expect more,” said Joe Hinrichs, president of The Americas for Ford Motor Company, who joined Bill Ford on the trip to South America that will include the centennial celebration of Ford’s operations in Argentina. “It will delight consumers with its sleek design, clever technology, attention-to-detail quality and superb craftsmanship. It also shows the continued importance of our South American design and engineering capabilities to serve markets around the world. It’s truly another global design and engineering milestone for Ford.”


The new Ka, according to Ford, will have best in class interior design with electronic features and craftmanship not normally found on “attainable”  cars. The automaker says that the Ka also will have best in class air conditioning, an important feature for emerging markets since many of them have relatively warm climates. South America and South Asia are expected to make up 44% of the global sub-B compact vehicle segment by 2017.

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Dispatches Do Brasil: Small Sedans Wed, 06 Nov 2013 14:41:53 +0000 new-2014-renault-logan-for-brazil-first-photos-69640-7 Recently, as to the attention given by TTAC to the spy shots of what might be or not a future Ford Ka sedan in southern Michigan, commenter Kenmore asked, “Has any other sad little runt of an econocar ever received so much attention on TTAC?”. Since you asked, I’ll offer up a brief pictorial explanation. Renault unveiled its new Logan this week. The Logan, which reintroduced this kind of car to parts of the developed world, has really shaken things up in the developing one, where the compact or subcompact sedan has never really gone away. In reality the small sedan segment is split into two groups: The more basic and simple one and the so-called premium sub-segment. To confuse the issue even further, size is a determinant, but not the only one in consideration when classifying such cars. Other criteria are date of launch or perceived modernity of the project, design and finishing, and in the Brazilian market, product placement by the maker in a market still pliable to this kind of machination. fiat-siena-2011-05   Let’s start off with the smaller, or better said, cheaper side of the sub-segment. In this one, you’ll find cars starting off at around 25 thousand reais (USD$12,500) and topping off at about R$33,000 (USD$16,500). They tend to be smaller and older and share front fascia and interior with their hatch brethren. Prime examples are the Chevy Classic (below) and Fiat Siena (above). th The (older) Classic is an offshoot of the 90s second generation Corsa, while the Siena is nothing more than a Palio with a big ole butt. For a while there, they were the sole survivors in this segment and carried the torch forward. Typically, they have a short wheelbase of less than 2.4 m though the Siena will hold more luggage than a Civic or Focus sedan. This would be the natural place of residence of a future Ford Ka sedan due to size. renault-logan The Logan, when it arrived 7 years ago, really shook up the segment. Having a wheelbase of almost 2.6 m, wider and taller than the aforementioned cars, it straddled the market from R$29,000 (USD$14,500) to upwards of R$40,000. It rocked the market not only for its size, but also for its relative modernity. Sitting on the BO variation of the Renault’s B platform that underpins everything from a modern Clio to a Nissan Livina (and many in between), it offered buyers a thoroughly competent ride, simple but sturdy finishing and low maintenance costs. As to those who might say the Logan is based on an old platform, all you have to do is compare where the wheels go on it. It is the same placement as in a Focus or Civic. Now look where the wheels go on a Siena. The older cars were really nothing more than a hatch with a trunk added on and driving dynamics suffered. volkswagen-voyage-2013-04 The Logan was such a big hit that others scrambled to get into the game. Ford offered up the (old) Fiesta sedan, VW, after an 11 year hiatus, revived the Voyage name by putting a trunk into the Gol. Size-wise these cars were closer to the original Siena and Classic. The first to offer some competition on the Logan’s terms was the Chevy Cobalt. No relation to the American one, it sits on a Sonic’s platform, has a love it or hate it design, a nicer interior than the Logan. Chevrolet Cobalt 2012 The Cobalt consolidated and proved there was a higher end to this market, in which a hypthetical Ford Escort would compete. The Asians took note and wanted in and Hyundai was able to cook up the HB20 sedan while Toyota half-baked the Etios, not to mention Nissan and its Versa. Much like Ford’s new Fiesta, these cars are entirely up-to-date, split the difference between the smaller cars’ 2.4 m wheelbase and the Cobalt’s and Logan’s 2.6 m and offer modern amenities not seen in the segment even a couple of year ago. In their case the sales pitch is different. toyota-etios-sedan-06 Ford and Hyundai are banking on the design while Toyota tries to focus on the brand by mentioning the Corolla in every piece of Etios advertising. Results have been mixed showing that in this higher end of the sub-segment design is all important. While a hot seller at launch, sales of the Hyundai have slowed as the novelty factor wears off, while the Fiesta’s are taking off due to that same factor. Toyota meanwhile languishes and the car has just received an interior redesign after less than 2 years on the market. You can’t turn on your TV or computer without seeing the sad little Toyota’s face. 1948-Gand_Siena_Tetrafuel Not only those strive for consumers’ checkbook though. Tired of seeing sales slip away to the bigger cars, Fiat was able to hodgepodge together its Grand Siena. Not quite Logan size, it offers a smart interior and more size than the old Siena, not to mention bigger engines. GM decided there was place in it line-up for a 3rd small sedan and developed yet another variation on the Sonic platform, the Prisma using the Onix hatch as a base, which is aimed squarely at the Asian completion. Hyundai-HB20S-sedan-traseira A very important segment indeed. One in which the makers have pushed up to previously unimaginable heights the price of lowly hatches. They sell, sell well indeed. With that long wheelbase, they offer room for families with teens. With the big trunk they offer space for families with babies. Being sedans and not quite the same looking as the hatches, they offer the buyers the illusion they’ve stepped up in the car market. Riding on modern platforms and offering bigger engines, they truly compete with the likes of Civic, Fluence and others for more rational buyers. They have found a sweet spot in the market where consumers are happy to pay more, and makers are happy to provide. They’ll be around for a long time.

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Ford to Invest $700 Million to Possibly Build Fusions In Canada, While VW Puts $529 Million Into Brazil to Locally Build Audis and Golfs Tue, 17 Sep 2013 18:51:04 +0000 Ford Oakville, Ontario Assembly Plant

Ford Oakville, Ontario, Canada  Assembly Plant

The Toronto Star is reporting that Ford Motor Co. will soon announce a ~$700US million investment in it’s Oakville, Ontario plant, where it assembles the Ford Edge and Lincoln MKX midsize crossovers. According to Toronto’s Globe and Mail newspaper, $135 million of that will come from the Ontario and Canadian governments, which recently divested some of their bailout related shares in General Motors. The investment by Ford follows commitments made to the Canadian Auto Workers, now under the banner of Unifor, to add 600 jobs to the Oakville facility.

The next generation Flex and MKX will share the CD4 platform with the Fusion and MKZ sedans. The investment means that Oakville will have the capability to build cars based on CD4 which raises the possibility that the plant may join Hermosillo, Mexico and Flat Rock Michigan in building FoMoCo’s midsize sedans. Ford recently added Fusion production at Flat Rock to increase supply of the car, which has been in short supply.

Automobile operations in Canada are jeopardized by the country’s current status as the world’s most expensive place to build cars. In addition to the Oakville plant, Ford operates two engine plants in Windsor, across the Detroit River from Dearborn.

To keep costs down, after the CAW ratified the current 4 year contract Ford offered 1,000 hourly workers incentives to retire. New hires to replace those retirees will start at a lower hourly pay rate and not reach the current full rate for 10 years.

Volkswagen Group Plant

Volkswagen Group Plant, Sao Jose dos Pinhais, Parana, Brazil 

Meanwhile, the Volkswagen Group plans to spend 1.2 billion reais ($529US million) in Brazil to restart local assembly of Audis and begin local production of the VW Golf, according to a spokesman for the Brazilian state of Parana.

Fifty million reais will go to expand VW’s factory at Sao Jose dos Pinhais in order to start assembly of Audi’s A3 compact sedan and Q5 compact SUV in 2015. A3 capacity is planned to be 26,000 units annually by 2018. The same factory will receive a 700 million real investment to prepare it to start building the latest Golf model.

Brazil’s federal government recently raised taxes on imported vehicles while offering tax incentives to automobile manufacturers that increased local investments. BMW had earlier announced a $267 million investment in a factory in the southern state of Santa Catarian, with a capacity of 30,000 units, starting production there in late 2014. Luxury sales in Brazil have increased due to rising wages for highly skilled professionals, persuading Audi to once again build cars locally. Audi had previously assembled A3s at the Parana plant from 1999 to 2006.

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VW Microbus Rolls Off Into The Sunset With 600 “Last Edition” Kombi Type IIs In Brazil Tue, 20 Aug 2013 11:00:37 +0000 kombosa-last-edition-2

Call it a Microbus, Kombi, or Transporter, the Volkswagen Type II (the Beetle was the Type I) is one of the oldest, if not the oldest, motor vehicles in continuous production, having first appeared on the scene in 1950. It was based on a suggestion and sketch by Ben Pon, VW’s Dutch importer and a water-cooled version of the second generation bus is still being made and sold in Brazil. Pon knew that Europe, rebuilding after the destruction caused by World War II, needed inexpensive cargo haulers and small commercial vehicles. Pon’s sketch showed a boxy body mounted to the Type I’s platform frame. The Type II ended up being more successful than Pon could have imagined, but production is coming to an end with a run of 600 “Last Edition” Type II Kombis, as the vehicle is called in Brazil.


Other than the radiator grille (for the ethanol burning water-cooled inline four that replaced the venerable and emissions spewing air-cooled VW flat four) rather inelegantly grafted onto the front of the vehicle, the Type II Kombi looks (and is) much like the second generation “bay window” Bus that was sold in Europe and North American from 1968 to 1979. Though still popular enough in Brazil to stay in production, the 45 year old design doesn’t give any thought to crush zones or passenger safety cells and it cannot be made compliant with modern safety regulations, even with airbags.

Agenda Ben Pon

The Kombi’s popularity with Brazilians can be seen in the pricing of the Kombi Last Edition, approximately $36,000 US, about double the price of a normal Type II in Brazil. Though second generation Buses don’t get the silly six figure money that the earlier split window versions can fetch, they are starting to appreciate and collectors outside of Brazil will likely buy some as well.


kombosa-last-edition-3 kombosa-last-edition-2 kombosa-le VW-Kombi-Last-Edition-1-600x400 kombosa-le-1 kombosa-le-3 kombosa-last-edition-4 kombosa-last-edition-5 kombi-le kombosa-last-edition-7 VW-Kombi-Brazil-March-2012b Volkswagen-Kombi-Brazil.-productionJPG vw_bus_draw_59-467x350 vw-bus-1950-8th-march Agenda Ben Pon ]]> 30
Dispatches Do Brasil: Small Crossovers, From A BRIC Perspective Thu, 15 Aug 2013 15:32:32 +0000 Ford_Novo_EcoSport (1)
Derek’s recent article on the CUV “event horizon” seemed to have been misunderstood by some of the B&B. Derek’s fine analysis showed you how one type of car, the crossover, has left its usual stronghold of America and is now eclipsing other kinds of cars in other markets. His proof is the new Mercedes GLA which shows that now everybody wants in. I posit that the “event horizon” came somewhat earlier in the form of the Renault/Dacia Duster and that this phenomenon had been brewing for a while. My home country of Brazil is one place where crossovers have been steadily rising in popularity.

For those of you living in the USA, it’s easy to dismiss small crossovers. You are blessed with open spaces, cheap gas and a choice of automobiles with limits that will never come close to being tested. Your streets are, and have been, littered for decades with huge land yachts in various forms: cars, full-size pickupss, SUVs and finally CUVs. It used to be that different markets had different requirements. Not anymore. Now, with globalization the kind of car you can buy has less to do with what you want, but rather what others want, even if they’re an ocean or two away.

For Americans, the CUV can be a bit of a let down. Not as capable as the Body-on-Frame SUVs and pickups of yore, not as roomy as the completely misnamed minivans prevalent in the North of the Americas, the CUV nonetheless fits the bill and offers a tangible set of advantages for consumers in world. Stepping up from their small, simple, crudely finished compact hatches, the latest crop of  CUVs offer more powerful engines, better build quality, more room (specially for your head!) and more prestige. European, Latin American and Asian consumers can and will rationalize and their new toy as a big step up from their old Ford Ka, Renault Symbol or Fiat Siena.

In markets where the population can afford it, the most successful crossovers aren’t all that different to the ones sold in North America. As Derek mentioned in his original post, the 9 of the top 10 4x4s sold in France are all on offer in the United States. I went over to Matt Gasnier’s most excellent best selling car blog to check out how CUVs in general where doing. To my great surprise there are 3 crossovers in the French Top 10. Three!!!! In France. Can you understand the significance of this? France, the country where the only truck-like vehicle that had managed to break into the top 10 until very recently, in all the history of French car sales, was the Dacia Duster. Now there are three CUVs selling in the top 10. And growing.

I see the effects here in Brazil. Some commenters on Derek’s article mentioned they had seen their first Range Rover Evoque. Here, in poor Brazil, it has been a somewhat common sight for over a year. You just can’t go to a mall without seeing at least two parked. I see them at least every other day in traffic.

You can blame Ford for this turn of events, since their EcoSport started the whole thing. Back in the 90s, somebody in Ford Brazil had the genius of seeing that the Euro Fusion of the times wouldn’t cut it here. Based on the Fiesta, the Euro Fusion was a tall wagon thingy, with a minivan-esque design (not like the Fusion you all know in America). Ford Brazil decide to butch it up and turn it into a jipe (that is how Brazilians used to call anything 4×4-like). A sort of jipe. One that was not big, didn’t really have any aptitude to go off-road or pull anything, but looked the part. Better yet, they discovered that they could raise the price over the regular Fiesta more than 40 percent and people would still buy it. The EcoSport simply doubled Ford’s market slice and improved their profits significantly. Undeniably a home run, or in Brazilian terms: Golaço! This is the formula that nearly every manufacturer is following now. Take your basic car, turn it into a CUV, make lots of money on very little investment for the improvements (raised height, cladding etc).

Then came the Renault Duster which did basically the same thing on the original Logan. Another star, another hit. Better yet, the French had the gall to take it to Europe to do battle with more refined opponents. Armed with a spectacular low price and a ride that was in no way offending, sales took off and the horizon event was reached. Like in Brazil, everybody scrambled to get a piece of the only growing pie in the market. Suddenly newspapers in their business sections and car magazines on both sides of the Atlantic started posting pictures and news of CUVs that may or not happen. The only thing you read about is the upcoming mini-SUVs. Renault Captur! Honda something or other! The Chevy anti-EcoSport was spotted somewhere int the world! VW confirms the Taigun (smaller than Tiguan) for next year! BMW will build the X1 in its new Brazilian factory! New factories are needed to keep up with demand! Sales! Money! Margins!

What does all that mean? Death to the station wagon for one. VW’s small Parati, a perennial Brazilian favorite, is dead. Fiat’s Palio Weekend has no substitute planned. In Europe, no more Clio or 208 station wagon. The really mini minivans are going too. The Chevy/Opel Meriva has already died, the Fiat Idea will soon join it.

And damn the enthusiasts. Or not. In America they talk and talk of the mythical brown, diesel, station wagon, but none buy them. In Brazil and other places outside the USA, all they want to see is that new shiny CUV in their garage. To them it’ll be a symbol of their success. The jacked up, ill-handling (comparing to a car), low capacity (comparing to a BOF SUV) will continue its sale rise.

How long? That’s anybody’s guess. I wouldn’t bet against the surging wave though. It is just gaining strength. If my wife and her friends (not to mention many of their husbands) have their way, the rise of the mini CUV will continue until there’s a least one in every family’s garage.

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The Truth About Brazilian Cars Being “Unsafe” Fri, 17 May 2013 17:19:28 +0000 used-fiat-brazil-450x337

This week, the idea of Brazil’s cars being “unsafe” due to inferior construction has been gaining a lot of currency on the blogosphere after the Associated Press published a report on this topic. Very few outlets have anyone posted in Brazil to do any deeper digging, but TTAC does. Unfortunately, our man Marcelo de Vasconcellos is currently in exams right now (good luck, Senhor!) and was unable to write up an article refuting these claims. Still, Marcelo took the time out to talk to TTAC about the problems behind the article.

The various articles floating around the web allege that Brazilian cars are doomed to be “unsafe” due to poor workmanship, excessive cost-cutting and poor grades of steel. Marcelo was able to speak to people at Fiat Brazil, as well as some engineering professors, and found out that the truth is that road fatalities are up, but not for the reasons people think they are.

A report by the Associated Press cites electricty savings on welding and shoddy workmanship as a key culprit behind the poor crash safety of Brazil’s cars

“If you save on electricity, you save on cost. One way to save electricity is either reducing the number of spot welds or using less energy for each spot weld made. This affects structural performance in the event of a crash.”

Marcelo asserts that since most of the cars sold in Brazil are unibody subcompacts, this argument holds little weight. Welds are done via robot, and the process is highly standardized, with little variation. Furthermore, many Brazilian made cars are exported. Fiats are sent back to Italy, while Volkswagens are exported to Argentina, the Middle East, Russia and other locations. Any cars sold in Europe must meet strict Euro NCAP standards, and the European magazines publish the results in great detail.

Brazilian steel is also blamed due to its apparently poor quality. Marcelo asserts this is false as well. Brazil’s iron ore is a sought after commodity on the world market as well (especially in places like Australia and Brazil), and Brazil is home to ValeInco, one of the world’s leading steel producers. This is far from the Eastern European sheetmetal that was notorious for causing Fiats to rust within minutes of coming into contact with road salt. We are dealing with a globally marketed commodity that must be competitive.

Marcelo instead places the blame on the increasing number of cars on the road, piloted by first-time drivers on poorly maintained road infastructure

The professor [Marcelo's friend who is an engineering professor] also commented that while the article showed an increase of 70% in fatalities (I think that’s what the article said, I have not read it) it did not say that the market has grown more than 150% over the last 15 years. Many, many of these buyers are first time drivers. Due to credit, many people don’t have the money to buy a used car (still more expensive here than in America) but they do have credit to buy said car in 60 months.

So, first time buyer, many times the first car in the family, many times young people, a disaster is waiting to happen. The other ingredient is of course the government. Badly maintained roads, almost no police presence on streets – an over-reliance on radars, just recently a crack down on drunk driving (the limit in Brazil is now 0, yes zero), lack of signs, roads designed and engineered and built in the 60s. Plus traffic conditions lots and lots of very old, decrepit really, buses and trucks…

Of course small cars are involved in more accidents. 70% of the market in Brazil is Palio, Uno, Gol, Fox, Celta, Classic, Sandero, Logan, 208, Ka, Fiesta and derivatives. All considered subcompacts in America. Of course they are in the majority of accidents. Of course most people get killed or maimed in them. A Gol sells 30k a month, a Corolla is lucky to get 3k…


As far as crash testing goes, Marcelo admits that Brazil does have a long way to go with both crash testing standards and mandatory safety features, but notes that the country is improving.

For you to have an idea, a Renault Sandero recently crash tested did better than a Chinese JAC 3. Detail: the Sandero was not equipped with airbags or ABS and the JAC was. Brazilian built Corollas got the same results as American Corollas. Now, airbags and ABS become mandatory next year. Look for Brazilian cars to then get the same results as their first world brethren. Take an American Fusion, strip it of its airbags and it’ll get the same 1, 2 or 3 stars Brazilian cars have been getting in such tests.

Brazilian cars are sort of middle of the road. They are not deathtraps but they are not first world because they don’t have lots of active safety systems. But they do have a lot of passive systems, collapsible steering wheel columns, collapsible brake peddles, fuel cut off systems in case of accidents, crumple zones, 3 point seat belts, they are all there.

While it would be irresponsible to ignore the AP’s report out of hand, it’s worth highlighting some of the non-car related factors in Marcelo’s interview. The lack of any drunk driving regulations, the substantial amount of inexperienced drivers on poorly maintained roads with scant traffic laws and the lack of any real enforcement of the rules of the road is clearly a recipe for disaster. Whether these locally-built subcompacts are in fact death traps is another debate that I’m not comfortable wading into.

One point that nobody has raised yet is the obscene prices that Brazilian consumers pay for cars. Often times they are 2-3 times more expensive than in America. Brazilian consumers could potentially be driving inferior cars and paying through the nose for them.

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GM Workers Go On Strike In Brazil Wed, 24 Apr 2013 14:15:36 +0000

Chevrolet’s Celta, Prisma and Onix models  will be in short supply when workers General Motors’ Gravataí plant in southern Brazil go on strike for higher pay and shorter hours. Workers of the plant’s first and third shifts already approved the strike, Reuters says, the second shift is expected to follow suit today.

The plant’s 4,500 workers demand a 12 percent pay increase and a reduction in working hours to 40 per week from 42. They turned down GM’s offer of an 8.29 percent raise and a 41 hour work week  by next January,

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Brazil in 2012: Fiat Celebrates Early For Fear That VW Will up! Them Mon, 24 Dec 2012 15:37:01 +0000

Video o.k. for network TV in Brazil, but NSFW in certain jurisdictions. Do not click if naked derrieres offend you.

The numbers for the first eleven months of the year have been consolidated. The first fortnight of December has been basically more of the same. It’s now quasi-official: Fiat is the biggest pig in the sty for the eleventh time in a row. They already have an ad out celebrating the fact. Last year the Italians waited until January to commemorate. This year they had no such compunctions.

Curious is the theme they chose to celebrate their victory. Don’t think a green-eyed spermatozoon, masturbation and bodily functions would be GM’s choice to celebrate their market dominance in stodgy America. Oh, those racy Italians!

According to a conversation I had with a senior Fiat suit last week, maybe this has to do with the fact that they are feeling the heat from VW and think they need to rub their leadership of the market in (due to VW being leader for 50 years and the Gol having been the most sold car for over 25 years, many Brazilians still believe VW is the leader in our market).

The Fiat grandee expects that next year VW will launch in the up! in Brazil. This car will be priced lower than the Gol and could give the Germans the lead in Brazil again after a decade’s hiatus. Fiat will have nothing new to fight the up!. Moreover, VW has recently hired the Fiat veteran who was basically responsible for car pricing in Brazil. This guy has his finger all over the market’s pulse and raised and lowered Fiat’s prices until he found the sweet spots. As other makers nowadays set their prices after Fiat’s lead (VWs start 5 to 10 percent over Fiat and Renault-Nissan low-balls Fiat 5 to 10 percent), the Italians worry (the exec confided to me) that VW now has the brains to regain for themselves the ability to establish pricing in Brazil.

Relative to the market, Fiat, Nissan and Kia made the most waves this year, according to Brazilian car specialist site webmotors. Fiat and Nissan in a big way and Kia in a negative way.

Despite increased competition and capacity constraints Fiat gained a little over 1 percent on the market by selling 11 percent more cars year-on-year. Nissan was the company to gain the most in sales (72 percent) while Kia lost almost 47 percent. Kia has not fallen out of favor with consumers but they suffered the most at the hands of government policy. Parent Hyundai also suffered. So much so that, relative to last year, they were overcome by their Japanese nemeses Honda, Toyota and Nissan.

Due to Nissan’s rise, Peugeot was shown the door of the top 10.

To put all of this in perspective, Brazil is the world’s fourth largest car market. Behind China, the US and Japan, but bigger than Germany, the UK or India.

Top 10 Brands, Brazil

Position (in 2012) Brand

Sales Jan-Nov 2011


Sales Jan-Nov 2012


Change (%)

1 Fiat






2 Volkswagen






3 Chevrolet






4 Ford






5 Renault






6 Honda






7 Toyota






8 Nissan






9 Hyundai






10 Citroën






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Brazil: Insurance Another Hurdle to Car Ownership Fri, 21 Dec 2012 16:08:55 +0000

Brazil has some of the highest car prices in the world. Taxes, protectionism and high margins, coupled with the fact that Brazilians are gobbling up each and every car built in Brazil guarantees that this fact of life will not change any time soon. On top of that, Brazilians must pay 4 percent of the car’s price each year as tax.

Another hurdle to overcome in order to stick that shiny metal blob of your dreams in your garage is insurance. Relatively low coverage, relatively high theft rates and lots and lots of accidents are the excuses insurance companies use to get quite a chunk of change out of their customers’ pockets and into their own. As you can see from the video, even those who should protect you, can be out to get you.

Webmotors, a well-know Brazilian enthusiast site, recently did a run down of just how much it costs to insure the top ten most sold vehicles this year. They used the profile of a 40 year old male living in the South Zone of São Paulo. The beloved VW Gol, the most sold car in Brazil for over 25 years and going, will force its owner to fork over almost 10 percent of the car’s price in order to get it insured. Just one of a myriad of reasons I have for never, ever, contributing my hard-earned money to keep this legend alive.

Below is a table showing the lowest annual insurance premium Webmotors was able to find for popular Brazilian entry models. The premiums were converted to US dollars at today’s rate of $.48 to the Brazilian real.

Annual cost to insure an entry level car in Brazil
Car Annual Insurance Percentage of Car’s Price
VW Gol $985 9.43%
Fiat Uno $801 7.48%
Fiat Palio $764 7.52%
VW Fox $1,093 5.46%
Chevy Celta $671 6.75%
Ford Fiesta $687 5.91%
Renault Sandero $514 4.50%
Chevy Classic $621 4.75%
Fiat Siena $669 5.38%
VW Voyage $493 3.80%

Don’t know about you, but I hate paying for insurance. My cars have never been robbed, I almost never get into an accident, in short, sometimes I feel like it’s wasted money. I for one am keenly aware of these numbers and they carry a lot of weight when I’m deciding which car to buy.

So, I want to know: Do you factor in the cost of insuring a car when you buy one? Or do you consider the cost of such so marginal that it simply isn’t a factor?

What do I hear? You pay much more for your BMW 550i? Ah, the land 0f plenty.



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Ford Sees Excess Capacity Hurting Brazil Thu, 15 Nov 2012 16:15:01 +0000

Excess capacity through 2016 will be a royal pain in the butt for Ford, hurting their margins on the all important small car segment.

Despite Brazil’s booming car market, capacity is expected to outpace demand by 20 percent each year until 2016. Mark Fields, Ford’s head of the Americas, told Reuters

“Excess capacity is going to put more pressure on pricing and margins, particularly in the B segment, or small car segment, which is the largest segment in Brazil”

Ford is one of Brazil’s four largest auto makers, with multiple assembly plants in the country. But market share for the “Big Four” has been eroding as new entrants capture the eye of consumers while also building new local plants to dodge hefty import taxes.

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UAW: Brazil Has It Better Than America Thu, 01 Nov 2012 14:07:45 +0000

According to the Brazilian enthusiast site webmotors, the UAW has come on down for the São Paulo Auto Show for the first time ever. Could it be that they were interested in checking out the product specialists?

Officially, no. The UAW is hard at work researching how and what factors drive Brazilian consumers to buy the cars they do. More specifically, the UAW wants to know if Brazilians consider or would be willing to consider work relations and conditions as factors in their decision.

Ginny Coughlin, the UAW representative in Brazil declared to “The future of the car industry is in Brazil. As purchasing power has risen over the last ten years, everyone wants in on the opportunities.”

The Federação Nacional dos Metalúrgicos (or, National Federation of Steelworkers), the Brazilian union, is helping out the UAW on this endeavor. João Cayres, the Federation’s International Relations secretary, stresses that they want to build awareness in Brazilians of the conditions under which their cars are built.

Case in point: Salaries. São Paulo area workers are the Germans of the Brazilian car industry. On average they earn twice as much as workers in other areas. Cayres likes the still Swedish Volvo trucks as the company that pays the best. According to him, those who sweat under the Italians at Iveco (Fiat’s truck arm) get the lowest salaries of all.

UAW’s Coughlin likes what she sees in Brazil and doesn’t like what she sees a home. Coughlin  bemoans that “America is going off in the opposite direction of Brazil. Income distribution is worsening as are work conditions.” She attributes that to the fact that unlike Brazil, U.S. labor laws are local and automakers actively take steps to block unionization. She also complains that temp workers are hired in a de facto permanent condition (without their corresponding rights), maternity leave is only ten days, workers  don’t have rights to a vacation and bonuses. In Brazil, all workers have 30-day paid vacation, Christmas bonus, severance compensation and up to 5 months of maternity leave.

So, what do you say? Do you consider worker benefits, salaries and conditions when buying a car? Does Coughlin have a point and should the U.S. become more like Brazil?

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Protectionism Hurts GM’s Business Fri, 26 Oct 2012 13:07:25 +0000

Attention pro-protectionists: Protectionism creates problems for one of your most favorite companies. GM wants to bring its new Chevrolet Trax SUVlet to Brazil, but Brazil is giving GM a hard time, says Reuters.

GM started production of the Trax in Mexico this month, with firm plans of shipping the Trax to Brazil. However, Brazil, the country lauded by pro-protectionists for its newly sealed borders and high taxes on imports, reneged on a free trade agreement with Mexico. Result: The small SUV market in Brazil goes to Ford (EcoSport), Renault (Duster), and Suzuki (Jimny). Honda said it would bring a small SUV to Brazil in 2014, and Volkswagen unveiled a mini SUV concept, the Taigun, The compact SUV segment is one of the fastest-growing niches in the world’s fourth-largest auto market, but GM has no product.

In the meantime, the Trax will be sold in more than 140 markets, but not in Brazil  yet. There are rumors of an expensive imported Trax, followed by a locally produced one, but Carlos Barba, head of GM design in Brazil, did not want to confirm this to Reuters.

“We are working on that. We have a plan. We’ll get there, but I cannot tell you the dates.”

It’s about time GM get’s its act together in that segment. “These guys are riding the wave for 10 years and we’re just looking at it,” Barba said. Protectionism can be a bitch if you sit on the wrong side of the fence.

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Marcelo’s Multi-Picture Report From The São Paulo Auto Show Thu, 25 Oct 2012 13:00:56 +0000 Brazil is now the world’s fourth largest market. With sales of almost 4 million cars, the magical 5 million mark is not a mirage anymore. Accordingly, São Paulo, Latin America’s second largest city and the economic hub of the country, holds the grandest of the region’s trade shows. Known as the Salão do Automóvel de São Paulo, the fair expects to attract over 750 thousand visitors.

Marking its importance, everybody’s here. From VW’s Martin Winterkorn, to GM’s Dan Akerson and Ford’s Tim Foley, not to mention assorted honchos with names difficult to spell from a host of Asian makers, everybody wants a piece of the bootylicious Brazilian pie. I can’t remember another Saloon in which more stellar members of the rarefied pinnacles of the worldwide car industry were present and making themselves so accessible to the press.

Let’s take a walk through the Salão and see the highlights according to this auto scribe’s humble point of view.

First off, Honda. The big news is that Acura will finally be making the rounds. In 2015 that is. To whet Brazilian appetites, the Japanese maker is showing off the NSX supercar concept. Brazilians are also getting their first gander at the ILX and RDX.

Honda proper is showing their version of the peculiar Brazilian sub-genre known as the aventureiro. Invented by Fiat, it’s nothing more than a visual package to give a regular car some of the cues of an SUV. Honda saw fit to fit its Fit with the treatment. Called the Twist, Honda’s take is maybe too tame for Brazilian tastes. At the show, Honda for some reason thought it appropriate to say that in 2014, the Civic will have a 2.0 engine as an option.

Over to Toyota. The world’s largest car maker decided to tease Brazilian with the best they have to offer elsewhere. They’re showing the 86, the Prius and two concepts: NS4 and Iiimo (with two ii), which they describe as the first tablet car. I’m sorry, but I don’t care. The 86 comes with a Toyota badge, the Prius is promised to be on sale for R$120,000 ($60,000 – look at what protectionism can do for you!). After wowing Brazilians with such potential, the reality sets in as they’re showing what they really sell us – the Etios.

Lexus has a big stand and is showing many cars and concepts. This time, they promise they’re here for real and are ready for the uphill battle against the über Germans. For sale there will be the ES and one, yes one, unit of the LFA. This one unit can be yours for two point nine million reais (one point forty-five million greenbacks)! The price was so big I saw it fitting to spell it out.

Over at Fiat, with not much to show, they decided to bring over the sisters to lend them some prestige and visits. They’re showing the Ferrari 458 and Maserati Gran Cabrio.

Of their own, they show two new versions of the 500, the Cabrio and Gucci versions and the rest of their usual line-up. Nonetheless, a visit to them is worth it, if not for the Ferrari, then for the booth babes. Fiat doesn’t disappoint here and I call them best in show!

On to the French. Renault is having an important year and is making an important launch. They show the face-lifted (in Brazil by Renault’s dedicated design center in São Paulo) Clio. Still the second generation, they get a face in line with their European offerings.

A conceptual Duster, the Juke-inspired Captur and an electric Twizy and Fluence are there to ignite imaginations. Not for us though. What really called my attention at Renault was a Willys Interlagos. This brand-new car is a replica of the first Brazilian sports car. Built by Willys in Brazil from 1961 on, it was done so under license from Renault as it used an Alpine as its base.

We well know that PSA is in trouble in Europe. Looking for some sales from their Brazilian subsidiary, Peugeot is showing the 208. It is aimed at the likes of Punto and Polo, and most comments have been very positive. Citroën’s stand however, is the real attraction. They show off the DS line and their recently launched models. For the first time in South America, Citroën’s all electric, sports car, the Survolt is on display.

To end our European tour, VW. The Germans are showing off all the creativity they can muster using the Up! as a basis. As for concepts, there is the water-proof Buggy Up!, the GT Up!, and the Taigun that forgoes the Up! in its name.

Of course, the regular version of the Up! is there, albeit in Euro-guise. Let’s hope Brazilians are not too disappointed when our simplified version comes out. Also interesting, VW displays its Cross Coupe which can be summed up as VW’s take on BMW’s X6.

The São Paulo show is a big one for the Americans. GM is showing off its new line. The traditional  dependence of GM do Brasil on Opel is in history’s dustbin. Now, GM do Brasil is firmly tied to Daewoo. Regardless of the controversial styling, the cars are gaining lots of conquest sales. More importantly, GM also shows the Onix. This supermini is already in production and differently from the other Daewoo-based cars was developed largely in Brazil (how much I can’t say, but this always an excellent way to gain points with patriotic Brazilians). GM suits are talking of taking on the Gol. Like with the HB20, the Gol as an inspiration is evident in the car’s design. Depending on price (not announced), the car could become a contender for the title of most sold car in Brazil. [Let's just hope the Onix never makes it to germany. It means "oh,  nothing" ion German - B] 

Ford is showing its new stuff, too. The highlight is the new Ford Fiesta. I don’t know if they consulted with Aston Martin, but the car’s fascia is now very British.

Also present and sporting the new family face are the Fusion and the EcoSport. Now in 4WD, the EcoSport is a darling of Brazilian consumers. The Fusion is causing a lot of shock. The first version to arrive boasts a price tag of R$113,00 ($56,500). Isn’t protectionism grand?

Showing that Brazilian engineering isn’t dead, Nissan of all people is showing the Extrem concept. Designed by Nissan’s San Diego, California office, Nissan swears the mechanical bits (1.6 turbo – 1.6 by Renault, turbo by Nissan) were developed in Brazil and shows Nissan’s love for my country (hahaha!). The car could turn into a future mini-SUV/CUV dedicated to fight market darlings EcoSport and Duster and future darlings Taigun and a future Onix-based Chevrolet product.

Finally, Hyundai. The great attraction is the HB20. Developed for Brazil, adaptation has happened fast. So much so that the Koreans are showing they have Brazil down pat and already have an aventureiro dubbed HB20X. Following the script more closely than the Fit Twist, the car sports a jacked up suspension, wider tires, but misses that much loved affectation, the tire mounted out back. Why, oh why, Hyundai? Also, a brand-new, imported i30 and Santa Fe.

Of course, others are here, too. BMW, Mercedes, Kia, the Chinese. The Chinese however are mostly speculation. The Mercedes and BMWs have all been seen elsewhere. Nothing new called my attention at Kia.

So, there you have it. I hope you enjoyed your visit.

Sao Paulo. Picture courtesy Acura NSX. Picture courtesy Honda Fit Twist. Picture courtesy Toyota 86. Picture courtesy Lexus LFA. Picture courtesy Ferrari 458. Picture courtesy Fiat 500. Picture courtesy Renault Clio. Picture courtesy Renault Captur. Picture courtesy Peugeot 208 GT. Picture courtesy Volkswagen Buggy Up. Picture courtesy Volkswagen Cross Coupe. Picture courtesy Ford Fiesta. Picture courtesy Ford EcoSport. Picture courtesy Nissan Xtrem. Picture courtesy Hyundai HB20. Picture courtesy Chevrolet Onix. Picture courtesy Zemanta Related Posts Thumbnail ]]> 34
Brazilians Will Get (Very Expensive) Cadillacs Tue, 23 Oct 2012 10:12:06 +0000

“The rich are becoming richer in Brazil,” GM South American chief Jaime Ardila told Reuters, Therefore, “it’s time to start thinking about bringing Cadillac to Brazil.” The Caddys will be very expensive.  “We wouldn’t consider producing Cadillacs here, because of the low volume,” Ardilla said, but we may consider importing the brand.” Imported cars carry high customs duty, fallout of a protectionist policy in Brazil that was applauded by carmakers in Brazil, GM among them.

Competition for the small luxury market in Brazil  (47,000 last year, down this year due to the much higher taxes) will be tough:

  • BMW announced plans to build an assembly plant in Brazil. to tap into that growth. No details of the plant were disclosed, but sources said BMW plans to invest at least $395 million.
  • Daimler built cars in Brazil since 1999, but switched to commercial vehicles in 2010.
  • Honda will bring its Acura brand in 2015.
  • Lincoln will take a rain check. Ford’s global sales chief Jim Farley told Reuters that Ford has no plans to bring Lincoln to Brazil.
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