This year will be a record-breaker for Brazilian auto makers, and 37-year-old Alexandre Rodrigues is one of the reasons why.
One recent morning, nearly half the salesmen at the Chevrolet dealership on busy Rua Consolacao in Sao Paulo were talking to clients. Rodrigues was busy preparing his bank data at a sales agent's desk, having just purchased a new Chevrolet Prisma sedan for 31,700 Brazilian reals ($17,909).
"I love the brand, but I love the tax break even more," Rodrigues said in a showroom packed with 300 new cars, two of them dressed with huge silver and red Christmas bows.
Brazil has become one of the few bright spots for major auto makers like Volkswagen, Fiat SpA and General Motors Co. While European and North American car sales declined, Brazilian sales have been rising all year thanks to tax breaks, lower credit costs, and new car models.
As a result, Brazil will sell more 3.1 million vehicles in 2009, up from 2.8 million in 2008, according to the Brazilian Motor Vehicles Manufacturers Association.
Alexandre Andrade, of Sao Paulo's Tendencias consulting group, said 2010 will likely see even heftier sales of around 3.5 million vehicles as Brazil's economy expands by at least 5%. "Sales could even go a little higher," Andrade said.
Last year, when it looked like the sky was falling on major banks in the U.S. and Europe, with ramifications felt around the world, car sales in Brazil plummeted.
Then, in December, the government temporarily removed a 7.4% industrial production tax on automakers, which passed on the discount to consumers. Car sales picked up. The government extended the tax break in March, then again in June and, in October, only this time just for small-engine flex-fuel cars that can switch between a gasoline blend and pure ethanol and make up the bulk of all cars sold in Brazil.
At the same time, banks like Bradesco, Banco do Brasil and Santander extended loan terms and kept interest rates low, by Brazilian standards, at around 1.2% per month.
"This has been the best year for us," said Marcio Chadi, sales manager at the Itacolomy Chevrolet dealership.
"But I can't see how 2010 will be much better," he admitted. "Once the flex-fuel tax break ends, sales should start to level off," he said at his desk, Ferrari wallpaper on his computer's desktop. The flex-fuel tax breaks ends March 31.
Auto makers continue investing in Brazil because of its sales outlook.
Volkswagen, the No. 2 car company behind Fiat, has said it will invest BRL6.2 billion over the next four years.
Renault, a small player, is investing BRL1 billion over the next three years to expand its market share from 4% now to 5% next year.
Ford Motor Co. is preparing for another record-breaking year in Brazil, selling more than 212,000 vehicles between January and November, up from 173,879 in the same 11-month period last year.
At the Itavox Volkswagen dealership, a 20-foot Christmas tree decorated with red ribbons and silver ornaments stands beside a row of black and silver Novo Gols, the number-one-selling car in Brazil.
"If the first two weeks of December are any indicator, it's going to be a good month and for sure a really good 2010," said Oscar Neto, sales manager at Itavox, a two-minute walk from the larger Chevy dealership on Consolacao.
According to the National Dealership Association, Fenabrave, December car sales rose 1.4% in the first half of the month compared to the first half of November, for a total of 124,828 passenger vehicles.
"The tax break and freer flowing credit have been a big help," said Neto. "This market is growing and will grow next year. But competition is definitely getting fierce."
(Source: irco.biz)
No comments:
Post a Comment