Carmakers eye modest Brazil recovery at low-key Sao Paulo Auto Display
SAO PAULO (Reuters) – The display stands packed with glimmering sheet metal were smaller than usual and all-new models were scarce. Even most forecasts for a recovery in sales were modest, in keeping with the mood as the Sao Paulo Auto Display opened on Tuesday.
It was a testament to the crisis wracking the Brazilian car market, once the world`s fourth-largest. Since reaching a record Trio.8 million vehicles in 2012, the market has almost halved in size.
Executives put on courageous faces. Most said the projected end of Brazil`s grinding recession next year would permit for single-digit market growth – the very first sales upturn in five years.
Yet few seemed ready to make big fresh bets on a market where automakers poured billions into fresh factories on the eve of the downturn. More than half of that capacity in Brazil now lies idle.
Volkswagen AG ( VOWG_p.DE ) is cutting investments in Brazil in the five years through two thousand twenty to seven billion reais ($Two.20 billion), down from ten billion reais in the five years through 2018, said Volkswagen do Brasil Chief Executive David Powels.
Ford Motor Co`s ( F.N ) fresh chief executive for South America, Lyle Watters, said the U.S. automaker planned to rebound after its drop from fourth to sixth place in the market, but had little to say about how.
«I don`t get out of bed in the morning to be in sixth place,» Watters said. The only fresh model he announced, the Mustang, will embark being imported to Brazil in 2018.
Watters and other executives projecting a recovery in two thousand seventeen weighted their optimism to the 2nd half of next year, once interest rates recede further from decade-highs and double-digit unemployment is expected to subside.
The most aggressive forecasts came from brands placed to capture a slice of the growing sport utility vehicle segment, especially compacts and crossovers.
The Jeep division of Fiat Chrysler Automobiles NV ( FCHA.MI ) aims to sell 90,000 vehicles in Brazil next year, up from 60,000 this year, as it adds domestic production of the Compass, according to Latin America director Sergio Ferreira.
SUV sales are likely to grow to more than seventeen percent of the Brazilian market next year, Ferreira said, up from fifteen percent this year. That is more than twice the seven percent growth seen in 2012, before Jeep built a plant in northeastern Brazil.
The most upbeat outlook for the market, an outlier among other forecasts, came from General Motors Co ( GM.N ), whose Chevrolet brand passed Fiat this year as the best-selling in Brazil for the very first time in over a decade.
GM, which is bringing its Tracker SUV to Brazil, expects Brazilians to buy Two.Four million fresh cars and light trucks in 2017, up from around Two.1 million this year, said Carlos Zarlenga, the head of GM in Brazil.
That is still a far sob from 2012`s Three.8 million sales. «We think the market is going to accelerate in the 2nd half of the year,» said Zarlenga.
Few are counting on such fast-paced growth in what Anfavea, the association that represents automakers in Brazil, says is now the world`s seventh-biggest car market.
But Toyota Motor Corp ( 7203.T ), which tripled its market share in the crisis to nine percent, has enlargened sales one percent this year and said on Tuesday it plans to increase them again by one percent next.
Toyota`s top executive in Latin America, Steve St. Angelo, is among those counting on acceleration in a market long stuck in neutral or switch sides.
In an interview ahead of the car display, he told Reuters he expected to see the overall Brazilian market grow around five percent next year.