Brazilian Paves Way for China’s Carmakers

With a burgeoning middle class, the Brazilian automotive market has expanded rapidly, becoming the fourth largest in the world in 2010. In such a fast-growing market, Brazilian consumers have developed no brand loyalty and show no aversion to foreign models, explains Joe Leahy of the Financial Times. So taking advantage of a market opportunity, Chinese car manufacturers like JAC Motors are steadily investing in the Brazilian market and relying on Brazilian talent: Marketing wizard Sérgio Habib heads up JAC Motors’ operations in Brazil, and talk-show host Faustão promotes JAC products. As a result, Chinese car manufacturers’ combined market share has gained a strong foothold in the market. But the Brazilian government is not so keen on foreign vehicles. With a global slowdown underway, the Brazilian government will impose a tax on cars with more than one third of their components made outside Brazil. South Korea and Japan will contest the tax at the World Trade Organization. Leahy concludes that the tax could provide the impetus for foreign car manufacturers to open plants in Brazil. – YaleGlobal