The Brazilian automotive sector is gearing up for significant growth as projections for 2024 are set to surpass expectations. According to Márcio Lima, President of the National Association of Motor Vehicle Manufacturers (Anfavea), the country is on track to achieve nearly three million vehicle registrations next year, contingent upon economic factors like the Selic rate settling at 9.25%, which currently appears to be merely aspirational.
During the last press conference of the year, Lima laid out optimistic projections, stating, "The Brazilian automotive sector will close 2024 with positive performance, achieving the highest growth among major global markets, fueled by strong sales increases, especially during the year’s second half." The projections are based on expectations of a steady dollar value at R$ 5.7, which Lima admits does not align perfectly with the prevailing economic climate.
For 2024, Anfavea anticipates vehicle production to rise by 26.2% compared to the first half of the year, culminating in registrations growing by 32% and exports soaring by 44.2%. This boost reflects the domestic market's rebound after experiencing sluggish initial months. By November, the sales average reached 13,300 units per day, marking the highest volume seen over the past decade. By the end of 2024, Brazil is expected to register approximately 2.65 million vehicles, which equates to a 15% increase over 2023.
Although these numbers indicate recovery, they still fall short of the pre-pandemic levels recorded in 2019. Within various vehicle segments, trucks are projected to see impressive growth at 15%, followed by buses with 8.5% growth, as the sector adjusts following the new emissions regulations enacted under Proconve.
Looking forward, Anfavea holds onto continued optimism for 2025, predicting vehicle sales will reach 2.802 million, reflecting a 5.6% increase compared to 2024 figures. Vehicle manufacturing is expected to increase by 10.7%, with the production tally reaching 2.574 million units. Despite the market’s internal growth of 15%, it faces challenges, particularly from rising import levels—which have escalated by 31.5%, mainly influenced by the success of foreign models, particularly those from China.
Lima warns of the potential adverse effects of rising foreign vehicle imports, which now account for 17.4% of total registrations, representing the highest share seen over the last decade. This trend contributes to the imbalance affecting the trade balance within the automotive sector, raising concerns about long-term sustainability.
Employment opportunities created by the automotive industry have also gained attention, with Anfavea reporting approximately 100,000 new jobs generated thanks to the industry's recovery. A total of 1.3 million direct and indirect jobs now depend on this sector. The group anticipates this upward trend will continue, buoyed by investments estimated at R$ 130 billion targeting research, development, and manufacturing. Special emphasis has been placed on roles requiring higher qualifications, such as those involved with innovation and technological advancements.
Meanwhile, the shift toward electric and hybrid vehicles has begun to take shape as seen with models like the Jaguar F-Pace PHEV, which combines combustion engines with electric power. This new trend aims to align Brazil’s automotive future with sustainability goals.
The automotive sector is not without its challenges, be it rising import statistics or changing market demands. Yet, as companies adapt and innovate within Brazil's automotive ecosystem, 2024 is projected to be pivotal, heralding potential recovery and ambitious growth after several difficult years.
The future certainly looks bright, with heightened expectations and determinations from industry leaders to navigate through economic uncertainties and market dynamics, ensuring the mobility sector remains strong and competitive on both domestic and global fronts.
