Sector briefing

Automotive Opportunities in Brazil

Why Brazil?
Brazil is the 6th largest producer of vehicles in the world. There are 25 automotive plants, 13 agricultural machinery plants and 12 engine & components plants, with a total of 50 industrial units established in 8 States. In addition, there are 500 autoparts manufacturers with 650 plants and 4 thousand dealerships. The whole chain employs 1.5 million people. Brazil is a major manufacturer of small and medium size vehicles. The current fleet amounts to 30 million units for a 190 million population. In Brazil, there is an average of 1 vehicle for every 7 people. The Brazilian automotive industry has 80% of market share in South America and represents 5% of the Brazilian GDP. Find general information on the Brazilian market conditions on UKTIs website. The Doing Business Guide for Brazil gives an overview of Brazils economy, business culture, potential opportunities and an introduction to other relevant issues.

The Brazilian automotive industry has 80% of market share in South America and represents 5% of the Brazilian GDP.

UK Trade & Investment Sector briefing: Automotive opportunities in Brazil

Opportunities
Automotive: Low carbon technologies, engineering services (software, consultancy, etc), lightweight components and advanced materials. Motorsport: Major opportunities in Stock Car, GT3 and Rally categories. Components and accessories (seat belts, seats, fire extinguisher, electronic instrumentation, telemetry), special components, green technologies and fuels. Tuning: Accessories and performance kits. Construction: Construction equipment used in the Heavy Construction, Oil & Gas and Mining industries.

2010, sales reached almost 2.9 million units, representing 86.4% of domestic market share. Volkswagen was the first OEM to launch the flex fuel technology in March 2003, and it was soon followed by General Motors, Fiat and Ford. However, most of the OEMs (Renault, Peugeot, Citroen, Honda, Mitsubishi and Toyota) are currently using the flex technology. The target is to incorporate the flex fuel technology in their entire lines as quickly as possible. Autoparts Segment According to Sindipeas (Brazilian Component Manufacturers Association), the autoparts sector's turnover reached US$ 49 billion in 2010. The forecast is to reach R$ 53 billion in 2011, an increase of 8.2% compared to last year. The industry invested US$ 1,5 billion in 2010, which represents an increase of 137.7% compared to 2009. Due to the heavy taxation applied to locally produced autoparts, OEMs have been importing more components than buying from domestic market. In the first bimester of 2011, the segment registered a deficit of US$ 715.4 million, an increase of 2% compared to the same period last year. In order to change the current scenario and increase domestic sales, the government will increase import duties to 14%, 16% and 18% Construction Equipment The leading manufacturers of machines and utilities for construction belong to the Sector Chamber of Road Machines of Abimaq (Brazilian Association of Machine and Equipment Industries). This Sector Chamber has 25 associates who in turn employ 10 thousand people. All members have their industrial plants in Brazil, located in the South and Southeast, with special emphasis to the states of So Paulo, Paran, Minas Gerais and Rio Grande do Sul. According to Sobratema (Brazilian Association of Technology for Equipment and Maintenance), 70,000 units of construction equipment were sold in Brazil in 2010, an increase of 70.5% compared to 2009. The forecast is that domestic sales will reach

Characteristics of the market

Automotive production used to be concentrated in So Paulo and Minas Gerais. However, this scenario has changed. New areas of importance to the industry were created such as Paran, Bahia, Rio Grande do Sul, Rio de Janeiro, Cear and Gois. FIAT is considering opening its second car manufacturing plant in Pernambuco state. The distributor network has been modernised, with more up to date buildings and facilities, a more professional approach to its organisation and more sophisticated technology. Brazil is also attracting massive overseas investments to the industry. Brazilian OEMs will invest US$ 11,2 billion in the market between 2010 and 2012. According to ANFAVEA (Brazilian Association of Automotive Manufacturers), this volume represents an acceleration of 38% on investments in the sector, which was US$ 8,1 billion between 2007 and 2009. ANFAVEA states that the sector produced 3.6 million vehicles in 2010, a growth of 14.2% compared to 2009. The Brazilian current production capacity is of 4.3 million units per year. Flex fuel Vehicles Segment The flex fuel vehicles, which can run on any mixture of bio-ethanol and gasoline, are rapidly gaining market share. In 2003, when the technology was launched, the market share was 7% with 84 thousand vehicles sold. In

UK Trade & Investment Sector briefing: Automotive opportunities in Brazil

77,000 units in 2011, an increase of 10.3% compared to 2010. The range of equipment are the so-called yellow line backhoes, skid-steer tractors, compacting rolls, hydraulic excavators, carrying shovels, power-grading machines, offroad trucks, derricks, cranes and compressors, among other products. If you have any questions on the opportunities above, contact the UKTI Brazil Automotive contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTIs website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to Brazil/automotive opportunities on a regular basis by registering on the UKTI UKTIs business opportunities service.

UK Trade & Investment Sector briefing: Automotive opportunities in Brazil

Major events and activities

SALO DE ACESSORIOS (TUNING) Date: TBC Venue: Expo Center Norte - So Paulo Organiser: Megacycle Eventos Website: www.salaodeacessorios.com.br SALO DAS Trade Fair) Date: Venue: Organiser: Website: SAE BRASIL Date: Note: Venue: Organiser: Website: DUAS RODAS (Two Wheels 4 9 October 2011 Parque Anhembi - So Paulo MG - Media Group do Brasil www.salaoduasrodas.com.br (Congress and Exhibition) 4 - 6 October 2011 annual fair So Paulo SP SAE Brasil www.saebrasil.org.br

SALO DAS Trade Fair) Date: Venue: Organiser: Website:

MOTOPEAS (Motoparts Intl TBC Expo Center Norte - So Paulo Anfamoto www.anfamoto.com.br

Find full details of all Brazil automotive events on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis. UKTIs Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events.

FENATRAN (Intl Transport Industry Trade Show) Date: 24 28 October 2011 Venue: Parque Anhembi - So Paulo Organiser: Reed Exhibitions www.alcantara.com.br Website: GP DO BRASIL FORMULA 1 Date: 25 - 27 November 2011 Venue: Autdromo Interlagos- So Paulo Organiser: International Promotions Website: www.intergroup.com.br AUTOMEC HEAVY AND COMMERCIAL VEHICLES (Autoparts Intl Trade Fair) Date: 10 14 April 2012 Note: biennial fair Venue: Parque Anhembi - So Paulo - SP Organiser: Reed Exhibition Website: www.automecpesados.com.br M&T EXPO (Intl Fair for Construction and Mining Equipment) Date: 02 06 June 2012 Venue: Expo Imigrantes - So Paulo Organiser: Sobratema www.mtexpo.com.br Website: SALO INTERNACIONAL DO AUTOMVEL (Automobile International Show) Date: 10 October 21 October 2012 Venue: Parque Anhembi So Paulo Organiser: Alcntara Machado Website: www.salaodoautomovel.com.br

UKTI contacts
Erika Azevedo Sector Manager British Consulate-General So Paulo Tel: (0055 11) 3094 2748 Email: [email protected] www.ukti.gov.uk Julie Yang Assistant Sector Manager British Consulate-General So Paulo Tel: (0055 11) 3094 2759 Email: [email protected] www.ukti.gov.uk Filipe Gotardi Intern British Consulate-General So Paulo Tel: (0055 11) 3094 1874 Email: [email protected] www.ukti.gov.uk

UK Trade & Investment Sector briefing: Automotive opportunities in Brazil

Next steps How UKTI can help

British companies wishing to develop their business in the Brazilian market are advised to undertake as much market research and planning as possible in the UK. UKTIs team in Brazil, with its wide local knowledge and experience, can provide a range of services to British-based companies wishing to grow their business in the Brazilian market. This can include: Provision of market information Validated lists of agents/distributors Key market players or potential customers in the Brazilian market Establishment of interest of such contacts in working with you Arranging appointments Organise seminars or other events for you to meet contacts and promote your company in the Brazilian market

This work is available via our Overseas Market Introduction Service (OMIS) a chargeable service which assists British-based companies wishing to enter or expand their business in overseas markets. To find out more about commissioning this work, or accessing other UKTI services and specialist advice, please visit the UKTI website to find contact details for your local UKTI office.

Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-governmentlicence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected] This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000.

UK Trade & Investment Sector briefing: Automotive opportunities in Brazil