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3.14 Million in 2009: Brazil Has Never Sold So Many Vehicles

Cars BrazilLast year, in Brazil, sales of automobiles, light commercial vehicles, trucks and buses totaled 3.14 million units, representing growth of 11.35% over 2008, according to data disclosed by the National Federation of Motor Vehicle Distributors (Fenabrave). The figure is an annual record high.

Considering automobiles and light commercial vehicles only, 3.01 units were sold, growth of 12.66% in comparison with the previous year. Out of those, 88% were bi-fuel vehicles, which run on alcohol, gasoline, or any combination of the two.

With regard to automobiles, Volkswagen was the manufacturer operating in the country that sold the most, followed by Fiat, General Motors Ford, Honda, Renault, Peugeot, Citroën, Toyota and Hyundai.

On the other hand, motorcycle sales in Brazil have decreased. A total of 1.61 million units were sold in 2009, as against nearly 2 million in 2008. There was a reduction in sales of highway implements as well.

Credit for Mercedes

A line of financing of 1.2 billion Brazilian reais (US$ 696 million), approved by the Brazilian Development Bank (BNDES), is going to enable Mercedes-Benz Brazil to develop, with the participation of Brazilian engineers, new models of diesel-fueled trucks and engines in keeping with the Program for Automotive Vehicles Air Pollution Control, scheduled to enter into force in 2012, as informed by the BNDES.

With the financing line, Mercedes will be able to increase production capacity at its unit in the city of São Bernardo do Campo, in the Greater São Paulo region, aside from modernizing the parts distribution center located in Campinas, in the interior of the state of São Paulo.

The increase in production in São Bernardo do Campo, which will go from 55,000 to 67,000 vehicles per year, will lead to the creation of 1,900 direct jobs.


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  • The Guest

    What a difference a decade can make
    What a difference a decade can make.

    Ten years ago, Latin America and the Caribbean entered the new century in the midst of tremendous uncertainty. The Asian financial crisis and the Russian default had thrown the region into a tailspin with countries facing recessions in varying degrees.

    Even after Asia rebounded, Latin America struggled. In 2001, Argentina’s economy collapsed and registered the largest debt default in history. To avoid a similar fate, Brazil obtained a credit line of $30.4 billion from the International Monetary Fund in 2002, the largest in the history of the multilateral lender.

    Today, the picture looks very different. News of default jolts other regions — not Latin America. As Brazilian officials like to point out, they’ve gone from debtors to creditors. For the first time in IMF history, Brazil recently lent money — $10 billion — to the world’s lender of last resort.

    That is particularly newsworthy considering that the region just withstood the worst economic recession in 80 years. And while average growth in the region dropped, largely driven by the downturn in Mexico, growth is expected to recover in 2010 to around 3 percent.

    By September this year, in fact, the worst seemed to be over for the region. Brazil, like other large emerging economies, is now helping lead the world’s recovery. Latin America’s net exporters, particularly Argentina, Brazil, Peru and Chile, are bouncing back thanks to higher prices for commodities, which are in higher demand due to ramping up of production and consumption in Asia.

    Economic growth, strength and recovery have increased political clout for regional leaders at the world stage. The Group of 20, which includes Argentina, Brazil and Mexico, officially replaced the G7 in September as the new arena for global economic policymaking. Plans to give emerging economies more voting rights at the IMF and the World Bank continue.

    Hard-earned clout, of course, doesn’t mean the region can avoid addressing an unfinished economic and social agenda. Even if only to preserve a slice of a smaller, post-crisis global trade market, Latin American governments and industries need to improve competitiveness. Many of the long-delayed reforms that make integration a worthy pursuit, from infrastructure and logistics to tertiary education and property rights, are even more urgent. Logistics costs are about 10 percent of product value in industrialized countries, but in the region they range from 15 percent in Chile to 34 percent in Peru.

    The region, too, must continue to diversify, connecting to markets other than the United States. As World Bank President Robert Zoellick has observed, “A multipolar economy less reliant on the U.S. consumer will be a more stable world economy.” Mexico, for instance, the Latin American country hardest hit by the crisis, was made vulnerable by its dependence of the U.S. economy — 80 percent of its exports are sold to the United States.

    Most important, Latin America must focus on innovation. It cannot continue to rely solely on selling more of the same — that is, commodities. The region will need to find ways to add value to goods or create new ones.

    Still, today the number of patents issued to Latin Americans for new inventions is a fraction of those issued to inventors in Korea, China, India or Singapore. Universities operate with few connections to the real economy.

    Except for Brazil, countries invest much less than the recommended 1 percent of their GDP in research and development.

    On the social front, the inequality trend was reversed for the first time in 30 years, with 60 million people leaving poverty between 2002-2008. However the region has not been able to provide opportunities for all its citizens.

    In spite of these challenges, Latin America is far better off than it was, when plummeting export prices and the collapse of foreign lending in the late 1970s ushered in an era of economic stagnation known as the “lost decade.”

    Thanks to sound fundamentals, such as improved financial regulation and supervision, budget surpluses and high international reserves, the region has weathered the current crisis without massive currency devaluations, bank collapses, debt defaults, inflationary spikes or capital flights.

    In other words, the region has learned from its past and is on track toward a better future.

    Still, a return to the strong growth of recent years is not guaranteed. It will require new proactive and visionary policies, enacted by equally visionary leaders, to ensure that the new decade we now enter will be an era of shared prosperity.

    Pamela Cox is vice president of World Bank-Latin America and the Caribbean.

  • Zico

    Cars Sales
    It helps that half of all automobiles in Brasil are wrecked every day.

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