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Automotive market perspectives Brazil 2014-2018


The automotive market in Brazil is suffering heavily from the weak macroeconomic environment and lack of consumer confidence. The demand for passenger cars in 2014 is expected to contract by approx. 8-12% and reach 3.2 – 3.3 million units compared to 3.6 million units in 2013. January through August, actual sales were 10% below the same period in the previous year. Production is additionally impacted by the economic crisis in Argentina with local demand down by 26% January through August 2014. The commercial vehicle sector is equally depressed and expected to shrink by up to 25% in terms of sales and production by the end of 2014.

According to the recent study, "Market perspectives Brazil 2014-2018 – Current market challenges and counter strategies," the situation is not expected to improve any time soon. "Brazil is in the middle of an economic adjustment heavily impacting the automotive industry. These adjustments traditionally last 2-3 years in Brazil," says Stephan Keese, Partner at Roland Berger Strategy Consultants in São Paulo and head of the Automotive & Industrial Goods Practice in South America.

The situation among suppliers is equally problematic. "Only a few suppliers that already restructured early on during the current downturn or that have a unique product positioning are capable of generating any profit in Brazil at the moment," says Martin Bodewig, responsible for Roland Berger's automotive supplier cluster in South America. "Brazil is the most important problem in the regional portfolio of a global automotive supplier."


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