Brazilian Industry - Part 3 Car Manufacture

Motor Vehicles

The renewed dynamism and modernization of the Brazilian automotive industry are broadly attributed to trade liberalization, which began in 1990, the introduction of lower-priced cars in 1993, and the start of the Real Plan in July 1994. In the seven years since 1990, Brazil has moved up from tenth to eighth place in world output, reaching 2 million vehicles in 1997. From 1997 onwards, output decreased registering a low of 1.4 million vehicles in 1999. And although the year 2000 registered an increase of almost 25 percent, this growth rate was not sustained, coming down to 7.4 percent in 2001 and actually registering a decrease of 1.3 percent in 2002.

Nevertheless, the industry earned almost US$ 8 billion from exports in 2002, producing more than 1.7 million vehicles. More important is the fact that more than 20 percent of output is for export, and that has been sustained, while imports have been decreasing, and have registered contractions of 49 percent from 1998 to 1999, and 42 percent from 2001 to 2002. In 2002 the most important motor vehicle export destination was Mexico (24.8%), followed by China (13.6%), and then Venezuela and Argentina (each 13.4%). 

Vehicle imports totaled just over 104,364 units in 2002 and 67 percent of these came from Argentina, with Korea and Japan holding 2nd and 3rd places, providing Brazil with 8.7 and 7.1 percent, respectively, of its imports. Brazil exported 8.5 percent of its total exports to the United States in 2001, and it imported 0.7 percent of its total imports.

However it must be pointed out that since 2002 the cars sold in Brazil are no longer on the Same Year/Model, or Generation as Europe, largely due to the fact that the market is always hungry for new cars, even if their quality and designs are obsolete. As an example of this I will cite the FIAT Mille, that is basically a 1982 FIAT Uno with different front lights, yet it is amongst the top 5 best selling cars, year in year out.

Brazilian Industry -Part 2 Power Generation

Power Generation

Brazil’s electricity is almost entirely generated by water power even though a considerable proportion of the nation’s hydroelectric potential remains untapped. By the mid-1990’s, Brazil’s output of hydropower was the third largest in the world. Almost 39 percent of the total energy demanded in the country, in 2001, came from renewable resources, while the world average is 14 percent, and if one only considers developed countries this figure does not exceed 6 percent.

In 2002, over 73 percent of the electrical supply in Brazil was provided by the hydropower segment, thermo-power reaching a far 12 percent, and the nuclear segment only 3.6 percent (9.6 percent was imported). Electric energy production by public agents as well as by self-producers in Brazil reached 344.6 TeraWatts/hour (TWh) in 2002, 4.9 percent over previous year. It comprised public hydroelectric generation of 278.7 TWh (+6.1%), public thermoelectric generation of 36.7 TWh (-5.2%) and the generation by self-producers, of 29.3 TWh (+7.9%).

The national power system is composed of two interconnected grids, one for the North and Northwest and the other for the South, Southeast and Central West. In 2002, the Brazilian installed generation capacity was increased by 6.2 GigaWatts (GW) and reached 82.5 GW: 76.8 GW as a public service and 5.65 GW from self-producers.