
A market challenged by external crises
In the last century, market protection in the form of tariffs and quotas on imports prompted companies to open or expand automotive production facilities within Brazil, helping stimulate the local economy. Brazil’s light vehicle production value reached close to 119.13 billion Brazilian reals (around 24.7 billion U.S. dollars based on June 16, 2023 exchange rates) in recent years. However, the sector has had to endure a few bumps on the road in the past decade, the latest being an unprecedented pandemic and global automotive chip shortage and rising raw material prices. In 2022, passenger car production in Brazil—which account for more than three-quarters of the country’s motor vehicle output—did not recover from reaching the lowest figure recorded in at least ten years in 2020. Around 1.82 million cars were manufactured in Brazil in 2022, compared to nearly 2.5 million automobiles in 2019. These challenges stopped the growth trend reported between 2016 and 2019, as the country started bouncing back from the 2014 economic crisis.Likewise, motor vehicle sales are also directly affected by a nation’s social and economic conjecture. In 2022, approximately 2.1 million new motor vehicles were sold in Brazil, a slight dip compared to 2021. Just three years earlier, this figure stood at nearly 2.8 million units. While this was the most prominent figure reported since 2014, it still lagged far behind the average 3.5 million units sold annually in the first half of the decade.