Latin America's Automotive Market: Flex-fuel Cars Driving a Remarkable Recovery

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The latest management briefing from just-auto.com looks into the Latin American automotive sector and analysis the contribution from the flex-fuel cars sector.

The latest management briefing from http://www.just-auto.com has acknowledged the significant contribution made by the highly dynamic flex-fuel cars sector in the astonishing recovery of Latin America's automotive industry.

Driven strongly by these ecologically friendly vehicles, car production and sales grew spectacularly in Brazil and Argentina last year. Overall, sales advanced by more than 14%, outstripping the most optimistic of forecasts. Indeed, sales in Brazil fell only marginally short of the highest ever annual total, recorded in 1997 prior to the economic collapse.    

Flex-fuel models are now dominant in Brazil where they account for almost 90% of all cars and light commercial vehicles sold. Furthermore, the portfolios of most manufacturers include flex-fuel cars whilst VW's Brazilian unit has stated that it will no longer produce petrol only models.

Production expands but overcapacity still in evidence…

Despite the increase in production, overcapacity remains a major issue. The rising value of the Real is also a concern and has even prompted General Motors to claim that as a production base, Brazil is as costly as Spain!

In neighboring Argentina, production for the year increased by a staggering 35%. The fact that exports are likely to exceed imports in 2007 indicates the extent of the turnaround that has taken place in a country that only recently seemed finished as a serious manufacturer.

Small vehicles, huge reputation…

For some time, Brazilian manufacturers have placed strong emphasis on small cars with engine capacities below 1,000cc. As a result, technical centers in the country have developed unrivaled expertise and are increasingly being used to develop new entry level vehicles. Engineered by VW do Brazil and exported to Western Europe, the VW Fox provides a notable example of this approach. The challenge going forward will be to continue to develop cars that appeal to domestic and international audiences alike.    

The briefing is one of over 50 available free to just-auto members. Monthly briefings published in the last year have reviewed the outlook for the industry, key events of 2006, Central and Eastern Europe, China, the product development of leading suppliers, light commercials, manufacturing platforms, the major motor shows, the financial health of the industry and leading engine families. Members also benefit from having unrestricted access to as many as 20 stories, articles and features a day and can choose to receive personalized alerts and newsfeeds. Further details on the Latin America briefing are available at http://www.just-auto.com/briefings/ whilst details of just-auto membership can be viewed at http://www.just-auto.com/offer.aspx

Notes:

1. About the briefing…

The fully updated and revised just-auto 2007 'Latin America automotive market' management briefing provides sales, production and export data by manufacturer for 2005 and 2006. It also examines the implications of the Brazil-Argentina trade accord, the region's strength in the production of small cars, flex-fuel cars and leading manufacturer strategies.

2. About just-auto…

Since 2001, http://www.just-auto.com has provided daily news and analysis on the global automotive industry. Today, just-auto is the authoritative and timely source of business information and is the automotive industry's leading online resource.

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Richard Jackson
just-auto.com
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