Brazil: Fiat/VW/GM set to sell 1 million autos each in 2014

Toyota to build a new plant in Brazil, Honda in Argentina, to produce small-sized cars

2011/01/28

Summary

 Below is a summary of recent market trends in Brazil and Argentina.

 The new vehicle sales in Brazil in 2010 reached 3.52 million units, including medium- and heavy-duty commercial vehicles, and outnumbered sales in Germany (3.15 million units) to become the fourth largest market in the world after China, the United States and Japan. The top four automakers, namely Fiat, VW, GM and Ford, represent 73.8% of the passenger car and LCV market in 2010.

 The automakers are increasing production capacity and development capability believing that the Brazilian market will continue to grow. Fiat, VW and GM anticipates selling one million units each in Brazil in 2014 while Fiat announced it will invest 10 billion reais (4.4 billion Euros) in total in the next five years, the largest amount among the four.

 Toyota has begun construction work of its second plant to produce small-sized cars starting in the second half of 2012. Toyota reportedly has decided to produce small cars that are suitable for the Brazilian market where Japanese automakers have been suffering from sluggish sales due to higher prices, such as Toyota Corolla and Honda Civic/Fit, compared to the mass-marketed models in Brazil (in the range of about 30,000 reais).

 Hyundai Motor and Chery Automobiles are planning to start additional production in Brazil in 2013 while Anhui Jianghuai Automobile began export sales toward the end of 2010.

 In Argentina a total of 720,000 vehicles were produced and 700,000 vehicles sold in 2010. Honda has built a new plant and will start production in the first half of 2011. Ford will invest $250 million to produce new models.

Major automakers' plans for Brazilian market

  Period Investment Goal
Fiat 2011-2014 10 billion reais (4.4 billion Euros)  Building a new plant in the state of Pernambuco with annual capacity of 200,000 vehicles. Increasing capacity of the existing Minas Gerais plant from 800,000 to 950,000 units. Planning to sell 1 million units in 2014.
VW 2009-2014 2.3 billion Euros  Investing to increase production capacity and new product development to sell 1 million vehicles in 2014.
GM 2008-2012 5.0 billion reais ($2.8 billion)  Investing to increase production capacity and new product development anticipating sales of 1 million vehicles in 2014. Starting production in the new engine plant in 2012.
Ford 2011-2015 4.5 billion reais ($2.4 billion)  Investing to increase production capacity and new product development. Developed the next-generation EcoSport (small-sized SUV produced in Brazil) in Brazil.
PSA 2010-2012 530 million Euros  Enhancing facilities at Porto Real plant for producing new Peugeot/Citroen brand models and engines. Has medium-term plans to produce 500,000 units in South America.
Hyundai Motor by 2013 $750 million  Building a new plant with annual capacity of 150,000 units to produce small-sized cars based on the Hyundai i20 starting in 2013 if all goes well.
Chery Automobile by 2013 (first stage) $400 million  Building a new plant in the state of Sao Paulo to start producing 50,000 units a year in 2013 with plans to increase the production scale to 150,000 units in the future.
Anhui Jianghuai Automobile starting from December 2010    Export sales of cars and SUVs began in December 2010 with plans to sell a sum total of 620,000 units by 2020.
Japanese automakers' plans
Toyota 2010-2012 $600 million  Building its second plant in Brazil to produce, in the second half of 2012, the small-sized vehicles based on the Etios introduced in India toward the end of 2010.
Nissan      Production started in 2009 of the Livina series models at Renault's Curitiba plant with plans to raise the market share from below the 1% mark to 5%.
Mitsubishi Motors 2010-2015 800 million reais ($454 million)  Will acquire control of the local production company and doubled production capacity from 50,000 to 100,000 units to start local production of the Pajero Dakar and Lancer.
Suzuki      Will produce 3,000 units of the Jimny a year in 2012 if all goes as planned.
Mazda by 2013 30-40 billion yen (new plant in Mexico)  Plans to invest ¥30 to ¥40 billion to build a new plant in Mexico and start production in 2013 at the earliest. Will reportedly sell from Mexico to Brazilian market as well.

Major automakers' plans for Argentine market

Ford 2010-2012 $250 million  Will invest $250 million in Pacheco Plant to produce new models, not produced at any of Ford plants, and supply them to South American markets.
Honda by 2011 ¥16 billion  Will start production in the first half of 2011 at the new plant being built in Argentina with an initial quantity of 30,000 units a year.

Source: Announcements by respective automakers



Brazil: 3.52 million vehicles sold in 2010

 The Brazilian automobile market rose to 3.52 million units in scale in 2010. A total of 3.64 million units were produced in Brazil and 770,000 units (21% of production) were exported to neighboring countries.

 Sales of imported automobiles also marked a steady growth from 80,000 units in 2005 to 660,000 units in 2010 (18.8% of new vehicle sales).

Production and export quantities in Brazil

(Vehicles)
  2004 2005 2006 2007 2008 2009 2010
Production 2,317,227 2,530,840 2,612,329 2,980,108 3,215,976 3,182,923 3,638,390
Export 758,787 897,144 842,837 789,371 734,583 475,325 765,680
Export/production 32.7% 35.4% 32.3% 26.5% 22.8% 14.9% 21.0%
Sales quantities in Brazil
Sales 1,626,232 1,711,972 1,920,139 2,487,701 2,864,482 3,141,240 3,515,064
thereof: domestic   1,631,217 1,786,036 2,227,136 2,493,178 2,652,366 2,854,923
thereof: imported   80,755 134,103 260,565 371,304 488,874 660,141
Imported/sales   4.7% 7.0% 10.5% 13.0% 15.6% 18.8%
Source: Brazil Automobile Manufacturers Association (ANFAVEA)
(Notes) 1. The new vehicle sales represent the wholesale vehicles in 2004-2008, and those registered in 2009-2010.
2. Sales quantities of respective automakers are shown at the end of the report.

 



Argentina: 720,000 vehicles produced and 700,000 sold in 2010

 The automobile production in Argentina increased from 510,000 units in 2009 to 720,000 units in 2010 while sales also rose from 490,000 to 700,000 units.

 Eight major automaker groups are operating in Argentina despite the limitation on the market scale. They are focusing on a small number of models to export to neighboring countries and sell in Argentina along with imported vehicles. Due to this situation, the ratio of exports to production, and the ratio of imports to sales, are as high as 60%.

Production and export quantities in Argentina

(Vehicles)
  2004 2005 2006 2007 2008 2009 2010
Production 260,420 319,755 432,101 544,647 597,086 512,924 724,023
Export 146,236 181,581 236,789 316,410 351,092 322,495 447,953
Export/Production 56.2% 56.8% 54.8% 58.1% 58.8% 62.9% 61.9%
Sales quantities in Argentina
Sales 311,961 402,690 460,478 564,926 611,770 487,142 698,299
thereof: domestic 108,572 143,282 188,479 234,354 238,465 198,732 269,534
thereof: imported 203,389 259,408 271,999 330,572 373,305 288,410 428,765
Imported/sales 65.2% 64.4% 59.1% 58.5% 61.0% 59.2% 61.4%
Source: Argentina Automobile Manufacturers Association (ADEFA)
(Notes) 1. Eight groups of automakers, namely GM, VW, Ford, Renault-Nissan, PSA, Fiat, Daimler and Toyota, are engaged in production in Argentina. Because of the competition, GM and PSA produced 100,000 units each in 2007 and 2008 but others produced only about one half.
2. Sales quantities of respective automakers are shown at the end of the report.

 



Top four automakers in Brazil (Fiat, VW, GM, Ford)

Fiat: Investing 10 billion reais to build annual capacity of 1 million vehicles in 2014

 Fiat is keeping the top position in sales in Brazil from 2005 to 2010.

 In December 2010, Fiat announced plans to invest a total of 10 billion reais (4.4 billion Euros) in Brazil to build a new plant with an annual capacity of 200,000 vehicles in the state of Pernambuco in northern Brazil, and to increase capacity of the existing plant by 150,000 units to prepare itself to sell over 1 million vehicles in Brazil in 2014.

 It is said the new plant will produce low-cost vehicles developed in Brazil for the Brazilian market.

Fiat: Building a second plant in Brazil and increasing capacity of the existing plant

 In December 2010, Fiat announced plans to invest a total of 10 billion reais (approx. 4.4 billion Euros, including investments in agricultural machinery division) in 2011-2014. The total amount includes 7 billion euro in the existing plant in Minas Gerais in southeastern Brazil to increase its annual capacity by 150,000 units from the current capacity of 800,000 units. Three billion reais will be invested to build a new plant, with an annual capacity of 200,000 units, in the waterfront industrial complex in the state of Pernambuco in northeastern Brazil with plans to start production in three years.
 In addition to the new plant with an annual capacity of 200,000 units, Fiat will operate an R&D center to develop new products and new platforms, and a training center for employees as well in the state of Pernambuco. Fiat plans to hire up to 3,500 workers needed for full operation.
 The new plant will produce new, low-cost vehicles developed in Brazil for Brazilian and South American markets.

Source: Fiat Press Release dated 2010.12.14

VW: Investing 2.3 billion Euros planning to sell 1 million vehicles in 2014

 VW ranks second in terms of sales after Fiat but has been the top automaker in terms of production quantity. VW plans to invest 2.3 billion euro in 2009-2014 for new product development and increasing production capacity. VW expects to sell 1 million vehicles in Brazil in 2014.

VW: Investing 2.3 billion Euros in 2009-2014 on top of the existing 1 million units annual capacity

 VW will invest a total of 2.3 billion euro in five years from 2009 to 2014 to increase sales in Brazil to 1 million vehicles in 2014. The investments will be spent to beef up facilities of the two final assembly plants in Anchieta and Taubat and the engine plant in Sao Carlos.
 VW is the largest automaker in Brazil with a daily production capacity of 3,000 vehicles as of November 2009. It also operates the largest sales network in Brazil with 600 dealerships.
 Every seven Brazilian citizens (every two Germans) had a car in 2009 and the ownership ratio is expected to increase to every four in the next five years. For VW, Brazil has grown to be the third largest market in scale only after China and Germany.
Source: VW Press Release dated 2009.11.27
(Note) VW produced 977,764 vehicles in January-November period of 2010 to become the top producer in Brazil (Fiat produced 693,878 vehicles in the same period). However, VW exported 366,283 vehicles in total including Polo, Spacefox, Gol and other models during the same period, to allow Fiat to lead the market in Brazil in terms of local sales quantity.

GM: Investing $2.8 billion in Brazil in 2008-2012

 GM expects that the Brazilian market will grow to 4 million vehicles in market scale by 2014 and that GM's sales will reach 1 million vehicles then. Therefore, GM plans to invest a total of $2.8 billion in the five years from 2008 to 2012.

 In July 2010, GM announced the resumption of construction work of the engine plant that had been suspended.

GM: Resuming construction work of the engine plant in Brazil

 In July 2010, GM announced that the construction work of the engine plant in Joinville that had been suspended due to heavy rain and floods that devastated the area toward the end of 2008 was to resume in August. Investments for the plant will reach 350 million reais (part of the $2.8 billion investment). Starting in 2012, the new plant will produce 120,000 engines and enough aluminum-made cylinder heads for 200,000 vehicles.
Establishing GM South America Division
 GM announced corporate reorganization, effective as of July 1, 2010, and the establishment of "GM South America Division" after splitting Brazil, Argentina and other South American countries from GMIO (GM International Operations). The headquarters will be placed in Sao Paulo, Brazil. The new division will have 29,000 workers and be engaged in the development of vehicles designed to meet the local needs and play a complementary role in GM's global product architecture.

Source: GM Press Release dated 2010.6.22/2010.7.20

Ford: Investing $2.4 billion in Brazil in 2011-2015

 Ford announced plans to invest a total of 4.5 billion reais ($2.4 billion) in the 2011-2015 period to strengthen its product development ability in Brazil. Ford has developed the next-generation EcoSport locally in Brazil, the current model of which has been produced in Brazil.

 As for Argentina, Ford announced plans to invest $250 million in 2010-2012 to produce new models.

Ford: Investing $2.4 billion in Brazil to strengthen its development abilities

 In November 2009, Ford announced plans to invest 4 billion reais ($2.2 billion) in Brazil in the five-year period from 2011 to 2015. Then, in April of 2010, the company revised the figure upward by 500 million reais to a new total of 4.5 billion reais ($2.4 billion). Ford plans to invest a total of $3 billion in the same period in South America as a whole.
Developing the new EcoSport in Brazil
 The most recent key recipient of investment in Brazil is the product development, such as the new model of the B-size SUV "EcoSport" developed by Ford's development center in Camacari in northeastern Brazil. The new EcoSport is based on the B-platform originally developed in Europe. Ford plans to develop five models based on the B-platform and produce 1.6 million units of them in the world in total in 2014.

(Note) The first-generation EcoSport was developed by Ford's development function in North America and has been produced in Brazil since 2004.

Investing $250 million in Argentina to develop new models

 In April 2010, Ford announced plans to invest $250 million in the Pacheco, Argentina plant by 2012 to refurbish its production facilities and start producing new models that are not produced by any other Ford plants in the world. The new models will be sold in Argentina and other South American countries. Ford plans to incorporate the Argentine plant in ONE Ford Plan.

Source: Ford Press Release dated 2010.4.7/2010.4.8

 



Other European automakers (PSA, Mercedes-Benz)

PSA: Investing 530 million Euros by 2012 to produce new models and new engines

 PSA began production in 2001 at the Porto Real plant in the present location. The plant is currently producing the Peugeot 206/207, Citroen C3/Xsara Picasso, etc. PSA sold 174,000 units in Brazil in 2010 and ranks fifth in terms of market share at 5.2%.

 In March 2010, PSA announced plans to invest 530 million Euros by 2012.

 PSA has a medium-range goal to sell 500,000 vehicles a year in South America (sold 294,300 units in 2010, up 26.7% from 2009) to catch up with one of the top four automakers in Brazil.

PSA: Strengthening production of new models and new engines

 In January 2010, PSA hired 700 additional workers and introduced a third shift in the Porto Real plant.
 In March 2010, PSA announced plans to invest 530 million Euros in the Porto Real, Brazil plant by 2012 to proceed with the refurbishing of facilities for producing new models under two brands (Peugeot and Citroen) and new engines.
 PSA began producing and selling the light pickup truck, Peugeot Hoggar, in May 2010 and the Citroen C3 Aircross (donned in SUV style) in the fall. PSA will start production and sales in 2011 of the C3 Picasso MPV (having more traditional style) that the Aircross was based on.
Source: PSA website
(Notes) 1. PSA plans to strengthen its operations in China, South America and Russia as highly promising markets.
2. The introduction of new products is expected to increase the coverage ratio of products marketed by PSA in Brazil and Argentina from 40% in 2009 to 57% in 2012.

Mercedes-Benz: Producing heavy-duty truck, Actros, starting in 2011

 Brazil is the largest market for Mercedes-Benz's commercial vehicle division. Over 80 percent of Mercedes-Benz Brazil's sales come from mid-sized or larger trucks and buses. The company recently announced that its Juiz de Fora plant will be the third plant, after the plants in Germany and Turkey, to produce the heavy-duty truck, Actros, starting in 2011. The demand for heavy-duty trucks is increasing in Brazil reflecting the recent increase in investments in construction, mining, farming and oil industries.

 



Korean and Chinese automakers (Hyundai, Chery Automobile and Anhui Jianghuai Automobile)

Hyundai: Starting production in 2013 at the new plant with annual capacity of 150,000 vehicles

 Hyundai's sales in Brazil registered a sharp increase especially of imported vehicles. The company sold a total of 106,000 units (registrations) in Brazil in 2010 and is planning to build a new plant and start production of small-sized vehicles in 2013. The company expects to sell 300,000 units of Hyundai brand autos in 2013.

Hyundai: Production to start in 2013 at a new plant with annual capacity of 150,000 vehicles

 Hyundai sold a total of 101,819 vehicles (wholesales) in January-November period of 2010 including 17,965 units of SUV Tucson and other autos assembled by Hyundai's import agency's CKD plant, and 83,854 units of imported Hyundai autos. The brisk sales of imported autos are said to be the result of the high appreciation of the local currency in 2010.
 Construction work of a new plant started in 2010. The company will invest $750 million and start production at the new plant in 2013 with an annual capacity of 150,000 autos. The new plant is said to produce small-sized cars based on the i20 and designed to meet the local needs.

Source: Hyundai Website and Press Release dated 2007.4.20/2008.9.18

Chery Automobile: Investing $400 million to build a new plant with plans to produce 150,000 units in the future

 Chery Automobile is investing approximately $400 million to build a new plant in the state of Sao Paulo. The company plans to start production with initial capacity of 50,000 autos (2 shifts) in 2013 at the earliest and to increase the annual quantity to 150,000 autos (3 shifts) in the future. Chery will start with the production of the 1300cc Chery A1 and add more models to reflect the prevailing market needs.

Anhui Jianghuai Automobile (JAC): Planning export sales of 620,000 autos in ten years

 Anhui Jianghuai Automobile, a Chinese automaker, is planning export sales of cars and SUVs in partnership with the largest automobile dealership in Brazil, the SHC Group. Shipment started in December of 2010.

 The company plans to increase the export quantity from 46,000 units in 2011 to 50,000 in 2012, and export 620,000 units in total in the ten-year span from 2010 to 2020.

 



Japanese automakers

Toyota to build a new plant in Brazil, Honda in Argentina

 Toyota is producing the Corolla in its plant in Brazil while Honda is producing the Civic, Fit and City in its plant also located in Brazil. But their locally-produced cars are priced higher than the mass-marketed cars in Brazil (around 30,000 reais) resulting in sluggish sales of 99,585 units and 126,439 units, respectively.

 In September 2010, Toyota began construction work to build a second plant in Brazil. The company will start, in the second half of 2012, to produce a small-sized car based on the Etios that was introduced in Indian market toward the end of 2010.

 In the meantime, Honda plans to boost its sales in South America from approximately 160,000 vehicles in 2010 to 240,000 in a relatively short time. Starting in the first half of 2011, Honda will produce small-sized cars at the new plant being built in Argentina.

Toyota building a new plant in Brazil, Honda in Argentina

Toyota  A ground breaking ceremony was held by TDB (Toyota do Brasil Ltda.) in September of 2010 to build a new plant with an investment of approximately $600 million. Toyota will start, in the second half of 2012, production of the newly-developed small-sized cars (sedan and hatchback models, based on the Etios whose production and sales began in India toward the end of 2010, and redesigned to meet local trends in South American markets including the compatibility with 100% bio-ethanol fuel) with the initial scale of 70,000 units a year. Toyota plans to export them to neighboring countries as well.
 Toyota had acquired the land for building the new plant in July 2008 but the start of construction work had been postponed due to the global financial crisis. The plant site is approximately 3,700,000㎡--more than twice that of the Indaiatuba plant.
 Currently Toyota is producing the Corolla at the Indaiatuba plant (annual capacity of 70,000 vehicles) and parts for the Corolla and Hilux at the Sao Bernardo plant.
Honda  Honda's sales in 2010 (including estimates) were 126,000 vehicles in Brazil and 160,000 in South American markets as a whole. Honda plans to build a 240,000 autos capacity in the shortest time possible. Honda has over 160 dealerships in Brazil as of the end of 2010 but realizes that 200 dealerships are needed to cover large and semi-large cities and will make continued efforts to augment its marketing channel in Brazil (Honda has 800 dealerships in Brazil for its motorcycles).
 Honda is producing the Civic, Fit and City in Brazil. Honda's Fit is priced higher than VW's mass-market model in Brazil, the Gol, while the "New Small Concept" to be introduced in India and Thailand in 2011 is too small for the Brazilian market. Under these circumstances, Honda is studying the feasibility of developing a Fit-size car designed exclusively for South American markets.
 Honda will start, in the first half of 2011, production of the Fit-based small-sized car with an initial scale of 30,000 units a year at the new plant being built in Argentina with an investment of ¥16 billion. The plant was to go in operation in the second half of 2009 but had been suspended due to the global financial crisis.

Source: Toyota Press Release dated 2010.7.16/2010.9.9, Honda Press Release dated 2007.7.18

Major small-sized cars in Brazil and cars built locally by Toyota, Honda and Nissan

Models Base engine
displacement
Overall size (mm)
Length×Width×Height
Price range (reais) Units sold in
Jan.-Nov. 2010
Fiat Palio
Fiat Uno
999cc
999cc
3827×1634×1433
3700×1636×1480
The base models
26,000-30,000
150,133
118,724
VW Gol
VW Fox
999cc
999cc
3899×1656×1451
3823×1641×1543
267,384
132,765
Toyota Corolla 1800cc 4540×1760×1480 62,110-88,250 49,492
Honda Fit
Honda Civic
1400cc
1800cc
3900×1695×1535
4489×1752×1450
54,905-71,720
66,660-87,665
37,859
30,542
Nissan Livina 1600cc 4180×1690×1575 43,990- 12,569
Source: Websites of each company, AUTO KATALOG 2010/2011
(Notes) 1. 1 real is worth approx. ¥50 as of early January 2011
2. Mass-marketed autos in Brazil range mainly between 1000cc and 1600cc displacement. According to PSA data, B-segment autos accounted for 81% of the Brazilian market in 2007, 78.8% in 2008.

Other Japanese automakers: Nissan, Mitsubishi, Suzuki, and Mazda

 Nissan has been producing the Livina series vehicles since 2009, in addition to the Frontier and Xterra, at Renault's Curitiba plant. Nissan's sales in Brazil rose sharply from 16,000 units in 2008 to 36,000 in 2010.

 Mitsubishi plans to increase its local production capacity from 50,000 to 100,000 vehicles in the next five years.

 Suzuki is planning local production of the Jimny starting in 2012 if all goes well.

 Mazda plans to build a plant in Mexico jointly with Sumitomo Corporation and is said to be seeking entry in the Brazilian market from Mexico.

Other Japanese automakers' plans in Brazil

Nissan  Nissan has been selling the Frontier and Xterra in Brazil produced at Renault's Curitiba plant. In 2009, Nissan began producing and selling the Livina series vehicles. Nissan's sales in Brazil are increasing steadily from 16,000 units in 2008, 23,000 in 2009 and 36,000 in 2010.
 In May 2010, Nissan announced medium-range plans to increase its market share from less than 1% to 5% in pace with the expansion of the Brazilian market, and also increase the combined Renault and Nissan share from 5% to 10% in the shortest time.
Mitsubishi
Motors
 Mitsubishi has the Pajero and the Triton pickup trucks produced by a local company, MMC Motores do Brasil. Mitsubishi will acquire over 50% control of the local company and plans to invest 800 million reais ($454 million) in the next five years to double the plant's capacity from 50,000 to 100,000 vehicles and start production of the Pajero Dakar 4WD and the Lancer sedan.
 Mitsubishi is said to have plans to start producing its electric vehicle, i-MiEV, in 2013 if all goes well.
Suzuki  Suzuki plans to start local production of the 1300cc small-sized 4WD Jimny in 2012 with an initial quantity of around 3,000 units a year. Suzuki first entered the Brazilian market in 2000 but withdrew in 2003. The company established a local sales company and re-entered the market in 2008.
Mazda  Mazda plans to invest ¥30 to ¥40 billion to build a new plant in Mexico jointly with Sumitomo Corporation and start production in 2013 at the earliest. Mazda is said to have plans to enter the Brazilian market from Mexico.

Source: Nissan financial reports dated 2010.5.12, reports in various newspapers

 



Sales quantities of automakers in Brazil and Argentina

 

Sales quantities of automakers in Brazil

(Vehicles)
  2004 2005 2006 2007 2008 2009 2010
Agrale 4,315 3,346 3,408 4,124 6,773 4,529 5,203
DaimlerChrysler 42,926 42,144          
Mercedes-Benz     39,849 48,993 57,718 53,982 75,159
Fiat 358,079 405,987 464,734 612,703 665,614 736,969 760,494
Ford 195,517 211,503 226,717 258,484 296,833 325,504 365,924
GM 377,055 360,934 402,624 519,199 560,849 595,491 657,706
Honda 52,114 57,522 66,657 87,956 121,725 125,869 126,439
Hyundai       18,098 42,261 71,049 106,012
Iveco 4,804 4,425 3,135 6,356 11,957 10,587 17,979
Land Rover 1,770 2,093          
MMC Automores 21,457 24,409 23,682 31,164 44,031 37,504 44,608
Nissan 8,595 7,195 5,858 5,636 15,704 23,225 35,874
PSA 64,496 81,495 101,238 132,345 152,803 151,159 174,383
Renault 55,428 46,496 49,665 76,674 115,363 117,521 160,299
Scania 6,676 6,127 5,765 7,524 8,831 9,097 16,314
Toyota 50,309 63,212 70,521 68,811 81,162 93,506 99,585
VW 370,982 381,575 416,874 539,658 586,549 686,408 700,620
MAN (Note 4)     27,366 36,455 44,974 41,068 57,364
Volvo Truck 6,529 6,063 6,347 8,138 10,493 9,007 16,756
International             100
Total 1,621,052 1,704,526 1,914,440 2,462,318 2,823,640 3,092,475 3,420,819
Others 5,180 7,446 5,699 25,383 40,842 54,430 110,321
Grand total 1,626,232 1,711,972 1,920,139 2,487,701 2,864,482 3,146,905 3,531,140
Source: Brazil Automobile Manufacturers Association (ANFAVEA)
(Notes) 1. The quantities for 2004-2008 represent wholesales. Those for 2009-2010 are the totals of the quantities taken from provisional reports of the passenger car and LCV registrations and wholesales of medium-sized or larger trucks and buses.
2. Mercedes-Benz' sales come mainly (82.5%) from medium-sized or larger trucks and buses (January through November 2010).
3. Mitsubishi has local production arrangements with MMC Automotores do Brasil.
4. In 2009, MAN acquired Volkswagen Caminhoes e Onibus, VW's commercial vehicle division in Brazil. The sales quantities through 2003 are included under VW. VW owns 29.9% of MAN shares.
5. "Others" represent imported vehicle sales by non-ANFAVEA member companies that include Suzuki, Kia, Chery Automobile and Anhui Jianghuai Automobile.
6. The passenger car and LCV market in 2010 were split among Fiat at 22.8%, VW at 21.0%, GM at 19.8%, and Ford at 10.1%, for the combined market share of 73.8% by the top four automakers.

 

Sales quantities of automakers in Argentina

(Vehicles)
  2004 2005 2006 2007 2008 2009 2010
Fiat 30,813 44,080 43,751 56,621 65,605 47,902 69,145
Ford 56,402 61,851 65,867 77,472 78,460 65,598 85,518
Mazda 19 18          
Jaguar 17 20 17 12 4    
Volvo 72 175 203 443 425    
Land Rover 156 213 244 227 187    
GM 56,020 72,782 76,228 94,399 96,634 78,078 112,213
Suzuki 8,710 11,194 9,391 9,618 9,330 7,385 6,060
Isuzu 711 747 21        
Iveco 2,018 3,424 3,005 3,629 4,699 2,272 5,011
DaimlerChrysler 8,119 12,058 13,823 16,980      
Mercedes 7,361 10,747 12,023 13,943 15,049 9,321 14,366
Chrysler 758 1,311 1,800 3,037      
PSA 36,085 52,761 64,978 83,728 77,732 64,725 87,124
Renault 29,282 43,255 58,988 68,740 74,591 64,372 97,369
Nissan 2,671 3,652 2,932 3,933 5,795 4,155 10,942
Scania 1,036 1,795 1,580 1,722 1,723 716 1,702
Toyota 12,990 17,035 23,563 28,057 31,837 27,913 33,012
VW 72,786 83,934 93,950 112,713 125,370 96,045 145,764
Total 305,551 392,975 445,733 544,061 571,700 456,942 651,224
Others 6,410 9,715 14,745 20,865 40,070 30,200 47,075
Grand Total 311,961 402,690 460,478 564,926 611,770 487,142 698,299
Source: ADEFA
(Notes) 1. "Others" represent imported vehicle sales by non-ADEFA member companies
2. The figures for Mazda/Jaguar/Volvo/Land Rover are included under Ford. Those for Suzuki and Isuzu are included under GM. Those for Nissan are included under Renault. Those for Mercedes and Chrysler up to 2007 are included under DaimlerChrysler.


Mid-term Production Forecast by IHS Global Insight

Brazil : Light vehicle production by Country (IHS Global Insight Forecast)

(Unit)

Group Brand 2008 2009 2010 2011 2012 2013 2014 2015
 AGRALE   AGRALE  231 118 371 385 442 466 526 544
 CHERY   CHERY  0 0 0 0 0 10,835 60,748 60,210
 DAIMLER AG   MERCEDES-
BENZ 
27,095 15,211 12,063 0 0 0 0 0
 FIAT GROUP  FIAT  722,447 736,620 762,686 825,707 965,653 963,762 992,180 1,025,917
 IVECO  6,834 5,655 7,031 9,637 9,231 9,745 10,455 11,034
 FORD   FORD  297,206 324,804 330,156 320,502 337,256 352,944 344,756 359,543
 GM   CHEVROLET  579,507 586,015 617,506 632,455 670,377 732,004 751,268 732,536
 HONDA   HONDA  131,139 132,006 132,030 144,675 139,558 205,431 258,227 276,660
 HYUNDAI   HYUNDAI  0 6,814 20,524 25,997 41,539 96,067 102,622 105,935
MAHINDRA
& MAHINDRA
MAHINDRA & MAHINDRA 0 502 872 818 841 816 810 828
MITSUBISHI MITSUBISHI 37,203 32,407 38,308 42,007 44,592 59,334 65,006 67,115
NISSAN NISSAN 5,316 18,792 17,649 22,748 23,459 25,810 28,406 29,646
PSA CITROEN 63,332 47,706 61,966 76,414 90,163 94,493 94,147 96,655
PEUGEOT 83,489 69,915 84,790 92,241 95,951 89,765 121,774 152,798
RENAULT RENAULT 128,621 121,529 167,471 159,271 169,151 155,134 177,757 189,127
TOYOTA TOYOTA 66,983 62,713 60,159 60,830 83,048 179,238 183,034 189,525
VW GROUP VW 717,009 769,956 815,339 831,780 820,454 835,292 849,662 873,540
Total 2,866,412 2,930,763 3,128,921 3,245,467 3,491,715 3,811,136 4,041,378 4,171,613

Source: Global LV Production Data (as of 6 Jan. 2011)

  • (Note)
  • 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
  • 2. Figures for 2008 and 2009 indicate actual production results.
  • 3. All rights reserved. Reproduction of any data will require permission of IHS Global Insight.

Forecast and Analysis: Industry and Production Outlook - Light Vehicles: Outlook for Light-Vehicle Production (As of 11 Oct. 2010)

Light-vehicle production in Brazil has expanded by 11% this year to 1.8 million units through the month of July. Plants should move at a pace of 270,000 units per month over the next few months, bringing production up to 3.12 million units for this year. We expect that production will remain robust now that OEMs have demonstrated that they are willing to make less profit in the interest of continuing the momentum in Brazil. GM's South America president Jaime Ardilla recently stated that there is higher competition in Brazil forcing the company to play with prices and reduce profitability, but the important thing is to continue growing at the same pace as that of the market. The big risk for Brazil moving forward is its dependence on Mercosur markets, as exports outside of Mercosur as negligible. There is concern regarding the impact of the strong currency on exports.

Passenger car output grew 7% through July to 1.48 million units. We expect that at current momentum, output should be in the vicinity of 2.55 million units. This would represent a 3% increase over last year's growth. The slowdown in momentum would mostly be due to the expiration of the reduction in the IPI tax in March 2010.

LCVs are faring much better, with over 30% growth to 322,000 units through July. The torrid expansion for LCVs is thanks to the reduction of the IPI tax on LCVs (for commercial use only, i.e., PUPs and vans) through the end of the year. As a result, we expect output of 572,000 units for 2010.

The number of employees at plants continues to grow. The total grew by almost 9,000 to 115,000 employees between August 2009 and August 2010. Many manufacturers are moving along with small increments in staff levels, in order to offset the costly overtime that extra shifts and weekends represent over prolonged periods of time.

Exports from Brazil showed positive growth during the first eight months of the year, up by an impressive 47% (compared with last year) to 305,000 light vehicles. It is important to mention that exports in the first half of last year were low, as export markets were adjusting for excess inventory and the domestic market was absorbing significant volume with the IPI reduction in place. Exports are projected to close at around 450,000–470,000 units this year. The challenge for OEMs in Brazil will be to try to secure more export markets, given the appreciation of the currency. The good news for now is that Argentina is posting favorable growth and this benefits Brazilian exports directly.

We are cautious about output in the region. The major risks remain the same: a meltdown of the domestic market, or strikes by the unions because of the dismissal of workers. To a lesser degree, price hikes (to recoup some of the investment being made today) or stronger-than-expected increases in commodity prices will join the list of risk factors for the region.

Industry and Production Outlook - Light Vehicles: Manufacturer Prospects

OEMs are looking at investing well over US$25 billion in Brazil by 2015. During 2008, the industry invested around US$4.9 billion—mostly geared at developing new products, improving efficiency at plants, and operating a third shift. This sum is double the average annual investment seen in recent years. The planned investment rate for the coming years compares with that seen in 1995–2001, when OEMs invested US$13 billion (US$26 billion if suppliers are included). For now, Toyota and Hyundai are setting up new plants, with an investment of roughly US$750 million each. Toyota is poised to begin assembly in late 2012 and Hyundai shortly thereafter (at the beginning of 2013). The two OEMs plan to build B-segment cars in the state of São Paulo. We expect output of light vehicles alone to ramp up to 4.5 million units of installed capacity by 2012.

An investment of close to US$3 billion will be completed at the end of this year (the last US$600 million projected for this year) at Fiat’s Betim plant. This will bring output above 1 million units, making it by far the largest plant in the world. VW has just completed an investment of US$2.1 billion in the 2007–10 plan and intends to spend a similar amount in 2011–13; the new investment plan encompasses the updated Gol family and a new Fox in 2013, and the clearing of bottlenecks at plants. GM has earmarked an additional US$1 billion for new programs starting in 2011, which is destined for the ONIX/GSV projects, and is on top of the US$1 billion already allocated for both the Viva and the GMT700. Ford is not far behind, and it keeping to plans to run two versions of the Fiesta from 2012. It will keep the current Fiesta B256 as an entry model while adding the B2E as a more premium offering—both will be built at Camacari. Renault has announced an additional US$500 million to update the Logan family; this will now include the Duster SUV, known by suppliers as H79.

 

 

Argentina : Light vehicle production by Country (IHS Global Insight Forecast)

(Unit)

Group Brand 2008 2009 2010 2011 2012 2013 2014 2015
DAIMLER AG MERCEDES-
BENZ
31,159 11,698 14,378 20,742 22,379 23,358 24,499 25,127
FIAT GROUP FIAT 28,700 78,573 92,113 78,071 66,228 64,656 67,526 71,156
FORD FORD 83,643 72,554 93,885 90,826 93,310 99,279 99,969 106,089
GM CHEVROLET 111,911 77,579 128,677 123,657 128,024 124,832 123,732 131,367
HONDA HONDA 0 0 0 7,452 23,491 30,543 30,720 30,238
PSA CITROEN 41,548 34,706 39,077 46,510 51,503 49,250 48,322 49,159
PEUGEOT 90,243 50,739 88,199 103,348 100,563 98,990 101,504 102,707
RENAULT RENAULT 73,336 65,470 85,675 115,287 119,717 116,731 119,075 125,887
TOYOTA TOYOTA 64,539 62,545 69,498 74,157 73,464 75,088 74,641 87,426
VW GROUP VW 63,156 52,034 86,373 96,263 98,211 95,305 94,347 102,510
Total 588,235 505,898 697,875 756,313 776,890 778,032 784,335 831,666

Source: Global LV Production Data (as of 6 Jan. 2011)

  • (Note)
  • 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
  • 2. Figures for 2008 and 2009 indicate actual production results.
  • 3. All rights reserved. Reproduction of any data will require permission of IHS Global Insight.

Executive Summary - World Car Industry Report: Outlook for Passenger Car Production (As of 23 Dec. 2010)

  • Production of passenger cars is up 38% through October 2010 to 398,000 units; this is more than was seen during the peak of 2008, putting Argentina in line for a new peak in car production. As a result, we expect that output should close this year with 488,000 units (the last two months should see the benefit of the ramp-up for the Renault Fluence and Peugeot 408). Given the strength of demand for Argentine passenger cars is the southern cone, we expect that this year's growth will spill into 2011, albeit at a slower pace, climbing to approximately 525,000 units.

  • Light commercial vehicle output has grown by more than 50% through October to account for 170,000 units. We expect that at this pace, the year will close with 210,000 units, which is also a new high for LCV output in Argentina. The recovery in output is a result of the improved conditions of the agricultural sector, which directly feeds into demand for LCVs. As a result, we expect that growth will spill into next year, with output ramping up to 232,000 units.

  • Exports have risen by over 40% to 359,000 units through October. We expect exports to continue doing well, as product in Argentina is being geared for regional and global markets. The real good news is that Argentina's main destination markets—Brazil and Argentina itself—are experiencing incredible momentum for vehicle demand, which is extremely positive for Argentine plants. Exports of the VW Amarok to Central America began in the third quarter of the year, while its exports to the rest of the world are due to begin early in 2011. Nevertheless, VW will only export the Amarok for about a year or so before relocating production of Amaroks that are destined for export to Europe back to Europe.

  • Installed capacity in Argentina has grown in recent years, in response to strained capacity in Brazil and to the Argentine automotive decree (issued in 2003) that requires an investment of 100 million Argentine pesos. By making the investment, OEMs are allowed to import parts—at a discounted rate—from countries where there are no free trade agreements. Whilst we had expected utilisation rates to stay low in Argentina, we expect a utilisation rate of 70–80% in the coming years, owing to tepid demand in Brazil.

  • OEMS are still on track to have US$3.5 billion of investment in Argentina in 2007–13. There have been announcements of several major investments for Argentina in recent years. Over 2007–09, Ford invested US$160 million at Pacheco for the re-skin of the Focus and Ranger. Plans for the Ranger T6 have been delayed for at least two years, because of the financial state of the company, and the Ranger received a face-lift at the end of 2009. GM invested US$200 million in the Viva programme—Agile, which replaced the Corsa 4300—and it is looking at further investment to increase output from the current 100,000 units to 120,000 units. Production is slated in Argentina instead of Brazil (because of the exchange rates) as the car will also be exported to the rest of Latin America. Fiat has shelled out US$300 million for Ferreyra to resume production of the Siena and Palio, as well as engines and transmissions. The Tata-derived pick-up for Fiat has been shelved indefinitely, yet there are no rumours of production of the Dodge Dakota after the Fiat-Chrysler merger. We do not think that scenario is feasible though as Fiat has a light commercial vehicle line in Sete Lagoas should it decide to offer the Dakota under the Fiat badge. Last but not least, VW is investing US$100 million to build the Robust pick-up, the Amarok, at Pacheco from 2010. The Amarok expected average annual build volume is in the region of 60,000 units—lower than originally projected because the vehicle will also be built in Europe.

Industry and Production Outlook - Light Vehicles: Outlook for Light-Vehicle Production (As of 13 Oct. 2010)

Production of light vehicles in Argentina has expanded by 47% through the month of July with 353,000 units built. The first half of 2009 was particularly rough on Argentina as there was a serious buildup of inventory in Argentina at the end of 2008, which translated into a sluggish first half. The Argentine manufacturer association is projecting total industry volumes of 680,000 units for this year. Our projection is close, with almost 670,000 light vehicles projected for this year. Argentina is benefiting from its weakening currency, making exports more attractive, and is poised for a year of significant new products: VW Amarok, Peugeot 308, and Renault Fluence.

Passenger car production is up by 42% to 250,000 units this year. Production of the Agile and Siena has been running at full steam, thanks to demand in Brazil. We expect that the launch of Fluence and 308 will cause this to spread to Renault and Peugeot later this year too. We thus expect car production to be north of 460,000 units this year.

LCV production is keeping pace with passenger car production: it has expanded 60% to almost 105,000 units so far this year. The LCV segment was hit hard last year, owing to the weakening of grain prices—a good indicator of the behavior of this segment. Given the recovery in the price of soy (compared with last year), the extension of the reduction in the IPI for commercial light vehicles in Brazil through December, plus output of Amarok for global exports, we expect a fairly robust year. Production should come in to the tune of 204,000 units.

Exports have risen at a similar pace, climbing by 54% to 224,000 units in the first five months of the year. We expect exports to continue doing well, as product in Argentina is being geared for regional and global markets. Exports of the VW Amarok to Central America and Mexico will begin in the third quarter of the year, and they should start heading elsewhere in the fourth quarter.

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