Economic Outlook n° 1188 | Special Report | Transport: a two-speedworld
Euler Hermes
▶ Brazil insearchof a secondwind Tosupport themarket, theBraziliangovernmenthadto lower,andinsomecaseseliminate, theindustrial products taxfromAugust2012throughend- December2012.Thismoveprovidedanautomatic boost tosales,whichareexpectedtoincreaseby7% this yearbeforecertainlyeasingback toaround3%to 4%in2013.Unit sales intheBrazilianmarket totalmore than2.8million,withmost vehiclemodelsoccupying themid-rangesegment,as inEurope.All themajor manufacturershavemanufacturingplants incountry, as they seeafavorablemedium-termgrowthoutlook givenavehicleownershiprateofonly15%.
▶ Russia couldbecomethenewgrowthenginefor the Europeancontinent Althoughthevehicleownershiprateishigheratnearly 25%, it isbasedonveryoldvehiclefleet thataverages morethan10yearsold.Butheremorethanelsewhere, theautomotiveindustryneeds toberebuilt.That explainswhy certainbarriershavebeenerectedin order toforcemanufacturers toproducevehicles withinthecountry. It isalsothereasonthat theleading Russianmanufacturer,Avtovaz (whichproduces the Ladabrand),was soldtoRenault,whichisnotonly investingcapitalbutalsocontributingitsDaciabrand models.TheRussianmarket isexpectedtogrowby 11%in2013andbyanother5%in2013, thereby exceeding3.1millionunitsandbecomingtheleading market incontinentalEurope.
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Brazil Russia PV registrations PVregistrations in Brazil 3.5 3.0 2.5 2.0 2.0 1.5 1.5 1.0 1.0 05 06 07 08 09 10 11 12 13 Sources : AssociaçaoNacional dos fabricantes de Vehiculos Automotores, EulerHermes forecasts 0.5 06 07 08 09 10 Sources : national statistics, EulerHermes forecasts 7 11 12 13 year-on year in millions of units forecasts PVregistrations inRussia 3.5 3.0 2.5 year-on year in millions of units forecasts