BMI's Executive Summary

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The pace of growth in Brazil's automotive industry has prompted BMI to raise its sales estimate for 2007 once again. As we reflect in the latest Brazil Automotives Report, all segments of the market registered levels of growth exceeding 25.0% in the first nine months of the year. For passenger car and heavy commercial vehicle sales the upturn was approaching 30.0%. New-vehicle sales have soared this year on the back of improved consumer confidence, tax cuts, better credit terms, falling inflation and economic stability. Strong sales growth has led certain observers to predict that Brazil may become the world's fifth or sixth biggest car market by as early as 2008.

According to data from the Brazilian vehicle manufacturers' association, Anfavea, during the period January-September 2007 total vehicle sales amounted to 1,783,270 units, a year-on-year (y-o-y) increase of 27.2%. Passenger car sales rose by 27.3% y-o-y to 1,433,001 units. After closely disputing the top spot for some time with Volkswagen (VW), Fiat took a definitive lead on the market, with sales of 383,788 units, up by 31.1% y-o-y. Second-ranked VW sold 349,427 units, an increase of 29.8% against the same period a year earlier. General Motors (GM) completed the top three, with total car sales climbing by 26.9% y-o-y to 337,496 units. Of the top 10 players, only Toyota reported a downturn in car sales, of 11.5% to 30,144 units. Nissan enjoyed the biggest gain of 204.4% y-o-y to 1,921 units. BMI's revised sales estimate for 2007 stands at 2.37mn units. Our outlook is positive for the remainder of the forecast period up to 2012 with car sales being buoyed by new product launches from industry majors such as Fiat and VW.

While vehicle output has also increased, particularly truck production, BMI has lowered its 2007 production estimate from an optimistic 3.075mn units to 2.74mn units, which is more in line with results for the year to September. In line with data from Anfavea, vehicle producers operating in Brazil turned out 2.049mn vehicles during the nine-month period. As mentioned above, truck production was particularly strong, rising by 25.9% y-o-y to 97,458 units. Volkswagen Caminhões e Onibus led the market with output for VW's commercial vehicle arm surging by 36.5% y-o-y to 27,435 units. Local manufacturer Agrale S.A. reported the biggest upturn in output for the period, of 87.5%.

Our industry development this quarter relates to the commercial vehicle segment. Ford's Brazilian subsidiary has unveiled investment of BRL300mn (US$171.5mn), which it will use to develop its commercial vehicle product range in the country. In line with its strategy to meet growing demand in the segment, Ford is expected to use the capital over a period of five years to update existing models as well as forge a place for itself in new niches. In BMI's view, Ford's plans reflect Brazil's positive business environment as well as quell any fears that carmakers are turning their attention away from the country to target growth in other emerging markets such as China.

Contents

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Chapter 1 – SWOT Analysis

Brazil Economic SWOT

Brazil Business Environment SWOT

Chapter 2 – Latin America Regional Overview

Table: Latin America Autos Production – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Latin America Autos Sales – Historical Data & Forecasts (CBUs unless otherwise stated)

Table: Latin America Autos Sales –Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 3 – Business Environment Rankings

Economics – Long-term Risk

Politics – Long-term Risk

CBU Output Growth

Vehicle Ownership/Penetration Potential

Regulation

Competitive Environment

Chapter 4 – Industry Forecast Scenario

Production and Sales

Table: Brazil Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Trade

Table: Brazil Autos Sector – Historical Data & Forecasts

Economic Contribution

Table: Brazil Autos Sector – Historical Data & Forecasts (CBUs unless otherwise stated)

Chapter 5 – Macroeconomic Forecast Scenario

Table: Economic Activity – Historical Data And Forecasts

Country Snapshot: Brazil Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Latin America: Automotive Focus Report On Premium Cars

Regional Overview

Table: Competitive landscape: Regional Comparison

Table: Prospects for growth in Latin America's premium car markets

Country Landscape: Brazil

Market Size And Opportunities For Growth

Table: Brazil: Proportion Of Imports And Premium Cars Relative To Brazilian Car Market, 2002-2005

Table: Brazil: Premium Car Sales By Segment, 2002-2005

Key Players

Table: Brazil: Premium car market by brand, 2002-2005

SWOT of Brazilian premium car market

Chapter 6 – Special Focus: Commercial Vehicles

Country Landscape

Table: Brazil Commercial Vehicle Market By Vehicle Type (2000-2005)

Table: Brazil Commercial Vehicle Production By Vehicle Type (2000-2005)

Light Commercial Vehicles

Table: Light Commercial Vehicle Wholesales By Manufacturer, 2000-2005, And Market Share 2005

Table: Brazil Light Commercial Vehicle Production By Manufacturer (2000-2005)

Heavy Commercial Vehicles

Table: Brazil Heavy Commercial Vehicle Demand By Segment (2000-2005)

Table: Brazil Heavy Commercial Vehicle Registrations By Manufacturer (2000-2005)

Table: Brazil Heavy Commercial Vehicle Production By Manufacturer (2000-2005)

Buses

Table: Bus Registrations by Manufacturer, 2000-2005, And Market Share 2005

Table: Brazil Bus Production By Manufacturer (2000-2005)

Forecasts

Table: Truck and Bus Sales 2004-2005 Actual, 2006-2010 Forecast

Table: Truck and Bus Production 2004-2005 Actual, 2006-2010 Forecast

Chapter 7 – Competitive Landscape

Market Overview

Table: Brazil Vehicle Production 2005

Industry Developments

Table: Brazil Domestic Vehicle Sales 2005

Manufacturers – Passenger

Manufacturers – Commercial

Manufacturers – Output

Investment

Company Developments

Chapter 8 – Company Monitor

GM Regional Overview

Table: General Motors Regional Car Sales

General Motors Regional Production

General Motors Regional SWOT

Company Profiles

BMI Forecast Modelling

Automobile Industry

Sources

Appendix: Regional Demographic Data

Table: Wages (ave. per annum), US$

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for North & South American Automotives: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Automotive Sources

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BMI's North & South American Automotives Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: