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Customer LoginsSUVs shine in a depressed Brazilian market
No matter where in the world you are reading this post, just look outside and count the amount of SUVs and crossovers you see. These vehicles have become popular by offering the benefits of all other body types, such as interior room, elevated driving position and towing capabilities. In many countries, they also represent status.
In Brazil, it could not be different. After the country opened its boarders in the early 1990s, the Jeep Cherokee was one of the first SUVs to be imported and it still retains its luxury appeal. Many other models followed, but price was an obstacle to increase volumes. However, the landscape changed when Ford launched the EcoSport in 2003. Based on the Fiesta, the EcoSport was an immediate success, being the first B-segment car-based vehicle to look like a real SUV.
The EcoSport enjoyed the market by itself for much of the first 15 years of this century, with registrations averaging 45,000 units between 2003 and 2014. And 2015 has been a pivotal year for SUVs, with many of Ford's competitors building B-segment SUVs in Brazil. This year, the Peugeot 2008, the Honda HR-V, the Jeep Renegade, the BMW X3 and the Mini Countryman started being built in the country, which makes us forecast that the share of SUVs will soar to 10.4% this year from 6.5% last year among all body types locally built.
IHS Automotive expects more five nameplates to be introduced next year and another four in 2017. By then, SUVs should represent 15% of the Brazilian production, compared to 3.4% in 2003. That is a very expressive growth, especially in a market that has fallen double digits this year and is expected to struggle once again in 2016.
On the other hand, station wagons are almost gone from the Brazilian market. They have been less than 1% of production since 2013 and we expect this body type to be extinct by 2018. It is easy to see how consumers in the dealer network would change to an SUV, which tends to offer all the convenience of a station wagon in a more stylish look. The same reason has impacted the MPV market, with makes such as Renault and Citroën already out of the segment.
Hatchbacks and pickups have lost some share as well and we except that consumers will migrate to "real" SUVs now that they are largely available, instead of buying a hatchback or a pickup with an off-road appearance. That has been the market appeal of trim levels such as the Renault Sandero Stepway, the Volkswagen CrossFox and the Fiat Strada Adventure.
SUVs have also been critical for some makes to expand in the Brazilian market. Thanks to the Reneagde, Jeep is now the 11th most popular brand in Brazil from the 24th place it had last year, and the HR-V is forecast to make Honda's market share jump two percentage points by the end of 2015 in the yearly comparison.
The future of the Brazilian market may be foggy, but it is definitely very bright for SUVs and crossovers.
Augusto Amorim is senior analyst, South American light vehicle production forecast, IHS Automotive