Other Best ProspectsOpportunities exist in advanced vehicle technologiesincluding automotive semiconductors, innovativelighting technology (LED/laser etc.); software, IT, Car-to-X communication technology; (smart) driving assistanceand infotainment; (integrated) mobility services andconcepts; range extender technology; and efficient andeconomical battery technology.2015 ITA <strong>Automotive</strong> <strong>Parts</strong> Top Markets Report 20
BrazilType: Large Market; Medium ShareWhile Brazil has a very large market with many positive advantagesand U.S. industry exports considerable amounts to the country, thenation’s highly protected economy offers limited opportunities forsignificantly increased exports.OriginalEquipmentRank23AftermarketRank27ITA ranks Brazil as the twenty third best market fororiginal equipment parts and the twenty seventh foraftermarket products through 2020. The U.S. shipped$1.1 billion in auto parts exports to Brazil in 2014. Themost reliable avenue for most firms seeking access tothe Brazilian market is through the supply chains ofvehicle assemblers or larger parts firms alreadyproducing in the Brazilian market.Overview of the <strong>Automotive</strong> <strong>Parts</strong> Market in BrazilBrazil is the largest automotive market in SouthAmerica with 3.8 million in vehicle sales in 2013. It isalso the largest producer of automobiles on thecontinent with over 40 facilities. The country had a2013 GDP per capita of $12,100. Industry sourcesexpect Brazil’s market to double its size by 2025, withsignificant sales increases by Korean, Japanese andChinese brands. Despite recent gains by Asian-basedfirms however, Fiat, Ford, GM and VW maintain nearlya 70 share of sales.Brazil has seen significant increases in vehicleownership levels in the last decade and there areroughly 180 vehicles per thousand people. Despite thegains, ownership remains less than half of developedmarket levels, giving significant room for growth.Unlike the U.S. market which skews toward largerluxury vehicles and light trucks, Brazilian marketvehicles tend to be mostly smaller and mid-sizemodels.Brazilian automotive production is geared toward thedomestic market and local models usually feature lowembedded technology, and market innovations arelimited with flex fuelled vehicles (running off eithergasoline or ethanol in any proportion) being a rareexception. Over 90 percent of vehicles sold in themarket are currently flex fuel capable. U.S.-based firmsare a large presence in Brazil’s automotive partsindustry.Challenges and Barriers to <strong>Automotive</strong> <strong>Parts</strong> ExportsBrazil has one of the most protected automotivemarkets in the world. Taxes are calculated in acascading fashion based on the CIF value (free onboard price, freight, insurance, and other portexpenses). The import tax is 35 percent, on top ofwhich is the 55 percent industrial product tax, then thestate tax (18 percent in Sao Paulo) and the SocialContribution Tax of 11.6 percent. Together these taxescan increase the price of imported cars by over 100percent.Figure 1: 2013 Brazil <strong>Automotive</strong> MarketSales (units) 3,767,254U.S. Auto <strong>Parts</strong> Exports to $1,068,812,369BrazilTotal Brazilian Auto <strong>Parts</strong> $16,240,490,876ImportsTotal Domestic Vehicle 3,767,681ProductionVehicles in Operation (2012) 29,566,116U.S. Auto <strong>Parts</strong> Export +93%Growth 2009-20142015 ITA <strong>Automotive</strong> <strong>Parts</strong> Top Markets Report 21
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