AFP (São Paulo) - Brazil's auto market — the fourth-largest in the world — is a top prospect for foreign carmakers seeking new buyers, with strong growth expected in the coming years, industry experts say.
Last week, China's JAC Motors (Jianghuai Automobile Co) announced it would invest $900 million to build a factory in Brazil, while German luxury carmaker BMW said there was a "high probability" it would also set up an assembly plant.
"The Brazilian market is one of the biggest in the world," finishing fourth last year behind China, the United States and Japan, the director of Brazil's auto industry group Anfavea, Ademar Cantero, said.
"This year, it should be fifth or sixth. But beyond its ranking, it's a promising market that will show positive growth over the next few years."
Five years ago, Brazil was just the 10th largest auto market worldwide.
But as Cantero explained, while US and European markets are nearly saturated, the South American country only has one car for roughly every 6.5 people — a ratio that is music to the ears of foreign firms.
The emerging power's "economic stability" and rising household spending translates into what he called a "social migration, towards a category of consumers who are only now buying their first car."
For Cantero, that means the market still has "enormous growth potential. This outlook attracts exporters, and those wanting to invest."
Over the first seven months of 2011, car production in Brazil's 38 auto factories — most of them in the country's southeastern industrial heartland — reached 2.02 million units, a 4.3 per cent jump as compared with last year.
Anfavea is looking for five per cent growth in domestic car sales in 2011, which would mean 3.69 million units sold, and production of 3.42 million units, which would represent a 1.1 per cent increase over 2010.
"The trend over the next few years will be to maintain this pace of growth," said Anfavea president Cledorvino Bellini. He noted that the industry group's projections were "prudent" given an "international situation that is not favourable, and about which we cannot predict the consequences."
