#Brazil

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

PSA is looking to challenge Renault-Nissan’s dominance of the low cost car segment with a new sedan branded as a Peugeot.

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.

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.

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.

Can’t bear the thought of another faux crossover? Too bad, we’re probably getting something like this when the next-generation Fit rolls around.

“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.

According to Bloomberg, Volkswagen CEO Martin Winterkorn claimed that “Brazil is very much a cornerstone” in VW’s push to become the world’s largest car maker by 2018.

Herr Winterkorn is in São Paulo for the largest and most important Auto Show in Latin America. Striving to make the most of this unique opportunity, the Brazilian press was all over VW’s CEO. He didn’t disappoint. He announced investments of 4.4 billion dollars to expand VW’s model line and modernize their factories in Brazil until 2016.

Well, they better!

Today, BMW confirmed what you could read here last week: The Bavarians will build a BMW factory in Brazil. BMW submitted an investment plan to the Brazilian government, BMW says.

Volkswagen will roll out its new NFS, MQB, MLB and MSB kit architectures to Brazil, Volkswagen do Brasil chief Thomas Schmall told Automobilwoche [sub]. The first representative will likely be a very small SUV, based on the UP! NFS (New Small Familiy) architecture.

The great October surprise announcement of progress at GM’s Opel front is turning into an October letdown. What will be announced “this month, early next month” will be a joint purchasing agreement between GM and 7 percent partner PSA Peugeot Citroen, GM CEO Dan Akerson told Reuters ahead of the Sao Paulo Auto Show’s media preview. In the industry, the joint purchasing agreement is seen as a non-event.

With Brazil’s national auto policy finalized, BMW has decided to go ahead with plans for an assembly plant in the country.

Brazil detailed their new five-year national auto policy, which is meant to spur investment in new auto factories, locally sourced parts content and reduced vehicle prices.

Here in Brazil, Toyota had to bow to pre-market pressure and lower the price for their Etios. Hyundai goes the other way and is betting that they will be able to command higher prices. In their first try to get at the juicy meat of the Brazilian market, Hyundai has launched their exclusive-to-Brazil small car, the HB20.

Starting from R$32,000 (US$16,000) and reaching an astronomical R$48,000 (US$24,000), Hyundai is claiming the car has two main differentials. According to Hyundai’s dedicated HB20 site the car acts as

“a model built in Brazil for Brazilians. It has Hyundai’s fluidic sculpture design and unrivaled standard content; the New HB20 is striking, modern and sporting.”

Hyundai indulges the buyer: even the lowliest trim will be “complete” by Brazilian standards. In other words, even the base car comes with air conditioning, assisted steering, double frontal airbags and trip computer (according to the folks over at Brazilian enthusiast site bestcars.com.br).

The Hyundai will be the first locally produced Brazilian car to sport an interesting three-cylinder, 1.0L, 12v with 80hp and can run on the local concoction known as gasoline and ethanol. As the engine is the same as the one in the imported Kia Picanto, I warn Brazilian shoppers that although it’s probably one of the best 3-cylinder motors out there, you will be reminded of its presence by the lawn-mower-like noises it emits

From R$37,000 (US$18,500), Hyundai will offer a 1.6L 16v engine good for 128hp. It is the same engine as the one present in the Veloster sold in Brazil, but it has also been adapted to run on ethanol. With this trim level, you get the same content as in the 1.0 car, but ABS is standard.

Little known to many, Toyota’s first venture out of their home country was in Brazil. Over 50 years ago, they built factory here in which they manufactured a version of their Land Cruiser, called it Bandeirante and kept on building it, unchanged, for almost four decades. When the Brazilian market opened up (ever so slightly) in the 90s, Toyota was relatively quick and soon had a second factory in which they built their Corolla. That was it. Until the Etios arrived.

Convinced by recent policy changes in Brazil that make the life of a car importer miserable unless factories are built on Brazilian soil, Toyota built a new plant near Sao Paulo, and started to crank out its BRIC-car, the Etios. The Etios was originally launched in the eye of BRIC, in India. Now, the car comes to the B. In Brazil, the Etios is aimed at the very heart of the market, the compact car. It already causes heart palpitations.