AUTOMOBILE INDUSTRY OF BRAZIL

International market entry and development of Automobiles in Brazil

International market entry and development of Automobiles in Brazil

Executive Summary

Brazil is among the world's fastest-growing economies and the government is actively encouraging foreign investment in order to enhance and stimulate economic growth. Brazil has the fifth rank as the largest country of the world. Brazil is the 10th largest automobile producer in the world. One of the emerging markets of the world is the Brazilian market. Brazil is one of the emerging markets where there are certain key issues in market assessment and entry strategy. After reviewing the economy of Brazil, many companies are willing and showing interest in entering Brazil market. This has made Brazil market to be competitive and increment in government initiatives. The Brazilian automobile market is facing increased competition from foreign, medium-and small-displacement cars. Liberalization policies have freed the sectors that were earlier under government control to private sector participation. The manufacturing sector of Brazil is well developed. The government policies support and encourage exports after the era of globalization. The productivity growth of Brazilian economy is slow. The government has protected her various sectors through import taxes. The automobile industry of Brazil saw a decline in exports when the Brazilian currency was appreciated. Suzuki was the first passenger car company to exit from the Brazilian market. The truck market had its exit from Brazil automobile industry by GM.

Introduction

Brazil has the fifth rank as the largest country of the world. Brazil is the 10th largest automobile producer in the world. One of the emerging markets of the world is the Brazilian market. It is emerging as the promising market of the globe. The currency of Brazil shot up very high after nine years of time period. People are being part of the growing middle class. Inflation is under control in the country. Sao Paulo, Brazilian Stock Exchange, have been titles ad best performing exchanges of the world. The Brazilian economy is an attraction for the investors and businessmen. Unemployment is declining gradually. The cost prices are stable even after the increasing population and consumer demand (KPMG 2010, 1).

The automotive industry is a vital part of the Brazilian economy. The car industry in Brazil has very bright future and is focusing on the agenda of low carbon emission. It is investing in research and development, which will ensure safer, cleaner and fuel efficient motor cars. Brazilian economy has very attractive prospects along with its dynamic and diverse offers. After reviewing the economy of Brazil, many companies are willing and showing interest in entering Brazil market. This has made Brazil market to be competitive and increment in government initiatives (KPMG 2010, 1).

The recent trend in Brazil automobile industry have decreased the vertical integration, increased the strategic partnerships and reduced the number of direct suppliers. Continuous improvement and innovation is focused on through strategic performance. Car manufacturers are more dependent on suppliers. The country's economy grew by 7.5% in 2010, buoyed by growth in gross fixed ...