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LATIN AMERICA: "Autos: Brazil Demand Weakening to Begin 2016" report

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back to index backLATINtalk January,  2006


Country Industry Forecast - The Brazilian Automotive Industry – US $ 795

Published May 2005

A relatively large consumer class, wide spread liking for Formula 1 racing and protectionist policies that continue to favor domestic industries aid in the Brazilian automotive industry's favorable position as a first-rate manufacturing sector.

This has made the automotive industry a major growth driver for the Brazilian economy. With globalization, the industry had to undergo extensive transformations and restructuring in supply chain management, product design process, and, the value adding process.

The supply chain was revolutionized with traditional verticalized structures of the assemblers giving way to smaller units with much fewer suppliers. In just a few years, Brazil has produced a wide variety of automobile brands. Innovative organizational designs, novel schemes for production facilities, and supply chain management by new plants make Brazil one of the most exciting automotive markets.

New macroeconomic reforms have gone a long way in making Brazil attractive to foreign investors. Privatization, deregulation, and removal of many barriers to competition have led to many multinational companies entering the market through Greenfield projects and acquisitions. Trade and investment policies are favorable to private investments and certain capital goods having infrastructure importance are exempt from custom tariffs and other taxes. The government's current emphasis on achieving global standards in its automotive industry has led to the opening of that sector to imports, while simultaneously introducing measures to rejuvenate the domestic industry.

The economy sprung back in 2004 due to several positive developments. Brazil is likely to expect exports to sustain the economy, considering that there is a strong regional trade agreement in place. This country is considered the base for serving the Latin American markets and such encouraging trends are expected to lead to positive growth in the consumer durables and automotive industry segments as well.

Country Industry Forecast Service for the Brazilian automotive industry uses a macroeconomic perspective to provide a focused analysis of the industry. This service covers an array of issues pertinent to the automotive industry – ranging from political issues, trade policies, and industry regulations and their overall impact on the industry. Besides enabling decision makers to assess the impact of non-market forces, this service also helps in identifying new opportunities. In addition, it provides a strong base for preparing contingency plans.

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