Matthias Brueck is the President and Managing Director of Porsche Latin America, Inc. Miami, the gateway to Latin America, is home base for Porsche Latin America. Brazil is part of the are that Brubeck is responsible for.
Porsche’s Brazilian President and Managing Director, Matthias Brueck, and Lamborghini’s President and CEO, Stephan Winkelmann, both said that sales have increased over the last couple of years for the ultra luxury market.
Brazil has 200,000,000 people and abject poverty. Guido Vildozo, Manager Latin America light vehicle sales forecast, IHS Automotive, says Brazil has its one percenters, literally. While the majority of Brazilians still make $350 a month, Vildozo says that 25 percent of workers are now making over $20,000 a year. Yet Porsche sold 1,100 vehicles in 2011. Will this change in 2012?
Porsche is part of Abeiva, Associacao Brasileira das Empresas Importadoras de Veiculous Automotores, the lobby group for the car companies that import cars. These companies are not part of the South American trade agreement known as Mercosur (along the lines of NAFTA), or the bilateral trade agreement between Mexico and Brazil. Most of these vehicles are luxury units, such as Lamborghini, Maserati, Jaguar and Chinese cars.
Ricardo Strunz is one of the Director’s for ABEIVA. Strunz says that Brazil has always had heavy import duties, and engine displacement tax, but now they have a new 30 percentage point tax on a vehicle commiserate with local production, or lack thereof, of a car company. This could mean that an imported car with an engine displacement of over 2-liters would cost an extra 90 percent.
Vildozo says to be careful, “the luxury market is growing, but not necessarily because incomes are growing, more because of the currency appreciation, so the cars are cheaper. Let’s use the RAV4 (because it is an imported car), before 2005 it was around $70,000. When the currency appreciated and the Real went to 1.6-1.7 you could buy that car for $40,000.”