By on November 7, 2014

Toyota_Etios_top_left_front

The Sao Paulo Auto Salon has just wrapped up, and auto makers had the chance to show off their wares for Brazil, and the broader South American market. While the economy may have slowed in Brazil, OEMs have

Audi and Volkswagen

Audi is bragging about their global numbers as they don’t have much to show here as their main rivals start local production. According to their talking heads, the brand will sell 1.7 million cars worldwide this year, their best number ever. The plan is 2 million by 2020 and Brazil will have share in this. Audi says this growth will come from large developing nations like ours, China, India as well as the other more developed markets like the United States. In Europe growth should be incremental.

Volkswagen, still the most Brazilian of brands in the eyes of many, lost their overall sales title to Fiat 13 years ago and this year may well see the Italian Palio taking over the Gol and breaking the latter model’s 27 year stint as the most sold in Brazil. Under pressure, Thomas Schmall, VW do Brasil prez, said they expect better results next year as the Brazilian market continues to grow and cites the ongoing revamping of their Brazilian line, extension of credit to customers and adjusting production to demand (ahem, lowering production Herr Schmall) as key to profitability and growth in this country.

Chery

Chinese Chery continues to promise to pop Brazilians’ cherry (sorry, irresistible) and showed of the two current results of their R$1.2 billion investment in their brand new plant in Jacareí, São Paulo state. The re-designed Celer and QQ will be produced locally as will the Tiggo SUV in 2016, and according to them, the ongoing restructuring of their dealership base will allow them to grow over the next years (the metropolitan area of my hometown, Belo Horizonte, saw the Chery dealer closing two years ago and no replacement yet…). Chinese cars have yet to make a dent in Brazil, but that doesn’t stop them from trying.

Chrysler and Fiat

FCA has chosen the Salon to talk Jeep. FCA do Brasil top honcho, Cledorvino Bellini, has confirmed the inauguration of the new plant in Pernambuco for the beginning of next year, but he did not confirm which Jeep models will be produced here. Rumors have it that it will be Cherokee and Renegade.

Fiat meanwhile is crowing and teasing. Crowing about their ongoing market leadership as this year will mark the 14th consecutive year at the top of the heap in Brazil. In 2014, they will be the only OEM with a participation of more than 20% as GM (down to 18%) and VW (in a US- GM-like slide down to 16%). They have managed to sell 100 thousand more cars than a runner-up the largest distance ever between them and the runner-up and their Palio model seems set to break the VW Gol’s 27 year hegemony in the market.

Talking cars, they promised but haven’t shown the 4 new Fiat models for the next years. Teasing, they showed a concept pickup that could be or not a new model or even the next Strada that could possibly don RAM horns and reach north of the Rio Grande. There are also some indications that the 500X will be produced in Pernambuco.

FCA do Brasil (did you notice I said FCA do Brasil? Yes they have also been fused here) is getting ready to reap the fruits of their 15 billion real investment in this country and what happens here will be indicative of the success and scope of their plans, reviewed and analyzed here and here at TTAC.

Ford

Ford is using the São Paulo show to celebrate the success of their new line in Brazil. The Ka and Ka+ (hatch and sedan) are critically acclaimed cars that have found a real presence in the market. In its first full sales month the Ka managed a volume of over 9 thousand, getting close to the 10 thousand mark that will make it the most private car bought model in this market. The Fiesta alone sells more than Peugeot 208, Citroën C3 and Fiat Punto put together, and completely dominates the premium compact market.

It seems Ford pretty much has its fingers on the pulse of the new Brazilian consumer and according to Ford South America president, Steven Armstrong, will continue investing in mobile connectivity so as to separate their cars from the rest. The American declared, “Brazilians deserve cars with new design and technologies”.

GM do Brasil

Santiago Chamorro, president of Chevrolet do Brasil, re-confirmed their 6.5 billion outlay between 2014 and 2018. That money will go towards “improvements in the current products, manufacturing processes and elements in the vehicles besides new products”. Confirming their second fiddle position in Brazil, GM has seen its market share diminish in Brazil. However, transaction prices for their cars are higher than main rivals Fiat’s and VW’s, so Chevrolet is among the most profitable here. Unfortunately, GM neither acknowledged nor denied the coming of the Corvette and Camaro Z.

Honda

The Japanese have finally decided on the name for their SUV-CUV-thingy, it will be the HR-V here. You may think that line was made out of disrespect, but it is kind of hard to respect their description of the vehicle. Roberto Akiyama, vice-president of Honda South America wildly declared that the HR-V “does not belong to any category known in the market today”. So that is Honda in the São Paulo Salon, going bravely off into where no man has ever gone before….

Hyundai and Kia

William Lee, top suit at Hyundai do Brasil, said that their goal is to bring the whole worldwide line of vehicles to this country until the end of next year. As only the HB20 is produced locally by them, not to mention the old Tucson by dear partner CAOA, it would seem the Koreans will become the top importer into Brazil. As rumor has it, they as pressuring the Brazilian government to “reconsider” its quota import system.

Kia meanwhile is sort of modest and supporting Hyundai in its quest to change the rules. It is showing 4 new models at the fair, however, it is passing along the collection bag by declaring that in order for some of them to reach our shores, government incentives are welcome (poor Kia!, donate now!). On the bragging side, Ari Jorge Ribeiro, sales director, claims Kia will launch 91 models until 2018. Investigating some, it could well be as that huge number breaks down as following: 31 reskins and some real launches and 60 derivatives thereof.

Land Rover

The Indian-British outfit has confirmed the model coming out of their new Brazilian digs in Itatiaia, Rio de Janeiro state. It will be the Discovery Sport. A smaller version of the Disco, its design has been evocatively influenced by another Land Rover model.

Mercedes-Benz

Celebrating its good moment in Brazil, outselling their rivals BMW and Audi, not to mention Lexus (yes, officially Lexus does indeed exist in Brazil though the dearth of their cars in the streets would belie that assertion), it will work in 2015 by extending their presence in Brazil by growing their dealership network. Presently at 44 dealers, Mercedes has confirmed that it will celebrate nine new stores until June of next years. Some of them are important indeed, as the Germans venture out into the North and Northeastern sections of Brazil, hotter and poorer than the regions more to the South. Comparing to other mainstream makers in Brazil, shows that they still have a ways to go yet as Fiat, GM and VW all control more than 600 shops countrywide.

Peugeot, Citroën and DS

When talking of PSA, we will now have to talk of three brands and not two. Citroën has confirmed in Brazil that DS is no longer a sub-Citroën-brand and is gaining a life of their own. As Eric Apode, vice-president of products and business development in Brazil for Citroën, said DS has sold more than 500 thousand cars since inception a couple of years back. Worldwide, DS intends to open 200 boutiques as their dealers are called, to continue consolidating as a brand.

Citroën, meanwhile, is celebrating a good year. The brand has grown globally. M. Apode claimed at the fair that Citroën is growing in all markets it is present in. According to him, while Europe is still their largest market and Brazil the third, China is of great importance to the company. “One of every 4 Citroëns sold worldwide is sold in China”.

Peugeot is following Citroën’s footsteps. 40% of their cars are now sold in places other than Europe. Maxime Picat, global director for Peugeot, affirmed that number should grow and that to do that, “Latin America is very important, strategically, for the brand”. The French have confirmed that their very successful compact SUV-CUV 2008 will be built in Brazil and sold all over Latin America next year. Over 200 thousand of the trucklets have found a home in Europe this year.

Renault and Nissan

Renault will finish the year at 7% market share in Brazil, a growth of about half a point over last year. For next year the target is a little more ambitious. According to Olivier Murget, Renault do Brasil president, they want 8% in 2015. In order to do so, they launched at the Salon the still conceptual Logan-Sandero-Duster-derived pick up. It has attracted all eyeballs here and gazillion flashes. Named Oroch, it is bigger than the current Strada, though slightly smaller than the global Ranger or S10/Colorado. The surprise was showing it first in Brazil and in Double cab.

Renault’s Global Alliance Partner Nissan is using the Show to show off their still new March and Versa, both now built locally. Furthering its commitment to their presence in this country, Nissan has claimed that new launches worldwide will have more Brazilian input. They will invest in Renault’s Curitiba, Paraná design center and Brazilians will help design all future global Nissans. In that way, they hope their design will be more attractive not only to Brazilians, but other fast-developing markets, crucial for Nissan forging ahead and despite all their propaganda, in this country at least, trading on their Japanese-ness.

Toyota

Of the Asian makes, Toyota is the most discreet in terms of claims. Quietly celebrating the Corolla killing of the Civic (and Focus, and Jetta, and others…) in that market segment and the continuously rising production of the Etios in both hatch and sedan styles. Toyota hints that the Etios dedicated factory is producing at almost ideal capacity and that soon expansion plans might be in order.

Talking of the Etios, Toyota, according to its South America unit president, Steve St. Angelo, has started exporting it to Paraguay and Uruguay as previously it was sold only in Brazil and Argentina. That should add another couple hundred to Etios’ totals as those markets is very small. However, it does show that Toyota is committed to local manufacturing and seeking out external markets.

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18 Comments on “Dispatches Do Brasil: Show Me The Money...”


  • avatar
    CoreyDL

    I really think you’ve got to:

    1) Include some photos of these things you’re talking about, as we the Americans and Canadians will be largely unaware.

    2) Tone down your anti-Honda bias. It’s coming through more and more!

  • avatar

    Hey Corey:

    1) Ask Derek, links to pics of everything mentioned were handed in with the article;
    2) I will direct you to my review of the Honda City, pretty balanced in spite of my alleged bias. Sorry, Corey, they’re talking crazy in their business practices in Brazil are inconsequential. So much so that the new Corolla is killing the Civic and the Cruze is close enough to pass it soon. I may also add that in the past I’ve been accused of anti VW or anti GM bias, too. As those companies have started doing things that I understand and can get behind of, my articles tone on them reflects that. The same will happen to Honda, when they start to get a feeling for this market. They do some things right here (there dealers are considered among the best, durability), but a lot of wrong (pricing, low feature content, pricing, small dealership network, pricing, withholding info on their cars from mechanics and general public, pricing).

    As always, thanks, for reading, :)!

    • 0 avatar
      CoreyDL

      I’ll have a look at the review, thx for the info!

    • 0 avatar
      petezeiss

      The impression I’ve gotten from Marcelo’s many excellent articles is that he’s not anti-Honda, just anti-Honda fanboism.

      I feel he’s been saying, “Alright, Honda already! But there *are* other great cars around, you know.”

      • 0 avatar

        Thanks for the kind words Pete. What bothers me is mindlessness of any kind. You have to reflect on your own and make your own conclusion of things. Words like always, never, words that paint with a very broad brush are “always” so dangerous….

        Guess I just wish the Honda, Toyota et al would do for us what they for you up north (really improve quality, get others to move on, offer a real benefit to consumers), but so far they haven’t though Toyota is slowly moving in that direction.

        Thinking about it, it is weird, but the fact that Fiat is the “newcomer” here, being here for a little over 30 years, well, they had that role here and is why I respect them (yes they had their errors, I’ve written articles for TTAC on the Tipo debacle for example) so much. So I do see why guys get enthused for Japanese brands in the US. Like the Japanese there, here it was Fiat that changed the status quo.

        • 0 avatar
          petezeiss

          Different markets, different realities. I hugely value your view from another major global market as well as your extensive general knowledge.

          The Japan Über Alles attitude that I happen to share is pretty obviously confined to North America and Japan. Japanese penetration of our NA market was a unique blend of historical events and domestic craptitude that, principally, Toyota made the most of. Most boomers will carry that attitude to the grave.

          And rightly so, in North America. But please keep informing us about the rest of the automotive universe ’cause THEY HAS GOOD STUFF, TOO! QUBO!

          • 0 avatar

            LOL! Yes, you get it. When Fiat got here (late 70s) and introduced the 147 (FWD, transversal engine, economy you couldn’t touch, crumple zones, internal space larger than even cars in a class or two above), VW was making the air cooled old Beetle, GM the Opel Reckford Opala and Chevette), and Ford a Renault 12 derived Corcel.

            They then launched the Uno and everybody just had to get with the plan. For better or worse, it was them, the newcomer with a bad rap, that set the tone of the market we have up until the current day.

  • avatar
    Big Al from Oz

    Again the TTAC site disallows a submission!!!!!!

    What’s going on?? TTAC, when can we expect this to be rectified??

    • 0 avatar
      psarhjinian

      “TTAC, when can we expect this to be rectified??”

      Suddenly, I had a horrible flashback to when I was young, unbroken helpdesk analyst.

      Say “Do you know who I am?!” next, just to complete the vision for me.

  • avatar
    Detroit-Iron

    Marcelo-

    Apologies if you have covered this before but what is pricing of a Corolla/Civic/Focus over there? Do you have a sense of what it would be in terms of purchasing power parity? I know in some markets tariffs can be 100% or more but obviously Brasil is large enough to have its own manufacturing base. I am really curious to know what models and at what prices Audi is selling.

    • 0 avatar
      Manic

      I went to Brazil last year, all cars were really small there. Cars are heavily taxed. No fun cars at all, sports or ‘verts. No SUVs. During 2 weeks I saw 3-series once and 1 C-class MB. Rentals have Fiesta as mid-level “standard”, but basically all the cars they had on-site were smaller Compacts (we got Fiat Nuovo Uno), Focus is Executivo in rentals and seemingly also in every day life. Ford.com.br says Fiesta Hatch starts from 17000 USD. Audi.com.br doesn’t show any prices.

    • 0 avatar

      Manic sort of has it right, but it depends what part of town you are in really. The other day in traffic I was surrounded by those luxury CUV blobs for example, all in silver…. Mercedes, Audi grew sales more than 100% this year. BMW “just” 27%. There could be more of them, but I guess people are careful. Porsche I think has after the main Europeans, the US, Japan and China, one of their largest markets here. Sports cars are heavily penalized by insurance companies and have little space to stretch their legs, so I guess that is why they generate little interest, plus we are in the middle of the CUV/SUV craze. Nowadays, sports versions are really few and far between.

      As to pricing, yes heavily taxed but also very healthy margins. Recently an off hand remark by one of the mainstream Japanese OEM suits made the rounds and caused some controversy. According to him, Brazil was the only country in the world that offered decent margins for manufacturers. Take what you will from that, but that to me means they all make a killing here.

      Corollas and Civic and Focus and Jettas sell between 2000 and 4000 units a month. I bet half are bought by companies. Sort of the same role a Series 3 has in Europe, roughly equivalent to Buick in the US. Our Civic and Corolla are Fiat Uno and VW Gol. while Renault Logan and Fiat Siena are the Camries and Accords. A 3 Series here would have about the same level of exclusivity as a Series 7 there, while a Series 7 here is almost like a Rolls Royce there..

      Yes, cars are small, but it is part of the car culture. THough CUVs are sort of bucking that trend, lots of people here that have the wherewithal to buy larger prefer to go smaller. Lots of people consider a Civic, a Focus an old man’s car.

  • avatar
    James2

    What car is pictured at the top? It looks like a front-end collision is standard equipment.

  • avatar
    Big Al from Oz

    Hey Marcelo,
    Another good piece.

    Your market is very price driven. It has to be.

    We do have Chery here in Australia and they are quite cheap. We have an AWD, CUV Chery the J11 for around $19k AUD or $16k USD driveaway. They come with all the bells and whistles.

    Even with the cheap pricing the Chery’s aren’t moving. The Chinese are finding it hard to gain any traction here with motor vehicles.

    I would like to drive one as the suspension tuning is done by Lotus. It would be interesting to see how it drives.

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