Reduction in car purchases affects Brazil's economy

For those who want to buy a new car in Brazil nowadays, it is not only necessary to have enough money, but also patience. However, there are still fewer and fewer people who can afford this luxury. Nowadays, the cheapest model costs around BRL 70,000, and the waiting lists last for a few months. Check out more about the economy in Brazil if no one buys cars anymore.

Read more: 4 very economical cars in Brazil based on Inmetro reviews

The Brazilian pays dearly!

An example of how incredibly high the prices Brazilians have to pay is to make the following comparison: currently, in Germany, a new vehicle is bought for the equivalent of 44 thousand reais, on average, while here the value is close to 70 thousand reais.

When considering the average salary in the two countries, the disparity becomes even more absurd. To buy the cheapest car, a Brazilian needs to work for five years, while a German only needs five months.

Another aggravating factor is that many people in various parts of the country depend entirely on cars, as public transport (bus, train or subway) cannot meet the demand of the population. Contrary to what happens in Germany, where passengers can reach any location using public and quality transport.

Brazil needs to use its advantages

After years of increasing per capita income, the Brazilian automobile market has become less attractive to automakers, who are now limited to offering models with higher profit margins in the price category average. So the list of included accessories has dwindled for years.

Among the reasons for the lack of engagement by automakers are unfavorable basic conditions, such as:

• The lack of semiconductors in Asia and the devaluation of the real make imports more expensive;
• The pandemic has messed up value chains;
• The cut of tax incentives for the automobile industry decreed by the Bolsonaro government.

These were significant factors that contributed greatly to Brazil's decline in importance as a manufacturing location on a global scale.

However, what is most questioned now is whether Brazil will be able to keep up with the revolution in the automotive industry in areas such as electromobility, autonomous cars and zero-emission engines.

With its ethanol experience, potential access to green fuels and the presence of 27 manufacturers in its territory, Brazil has global advantages as a manufacturing location. So, you need to know how to use them.