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Customer LoginsWhen Porsche outsells other German luxury brands in Brazil
Do you think a Jeep Grand Cherokee is a direct competitor of a Porsche Cayenne? Would you add the Volkswagen Touareg to the competitive set? Well, many Brazilian consumers do. And the results may be surprising.
Let me start with the winner in the SUV/crossover segment. Land Rover is the preferred brand. The Range Rover Evoque sells over three times more than vehicle number two, the Volvo XC60. And the Freelander (LR2 in the US) comes right in third place. Looking one length class above, the competition is fiercer, but the Discovery (LR4) has the highest volume. Finally, in the large segment, Land Rover sells five Range Rovers for each Mercedes GL-Class that leaves the dealer network.
There is no doubt Land Rover is doing well all over the world, so it is natural that it is the market leader in Brazil among off-road vehicles. However, what is striking to me is how well the Porsche Cayenne does. Last year, according to preliminary numbers, 622 Cayennes were registered ahead of Mercedes ML-Class, BMW X5 and X6, Audi Q7 and Volkswagen Touareg. Our light vehicle forecast for next year accounts for 571 Cayennes, but Porsche will sell even more SUVs thanks to the Macan.
Porsche has only five dealers in Brazil, a country larger than the continental US Land Rover has 35 dealers, while BMW has 38 and Mercedes has 37. The most "affordable" Cayenne costs 329,000 Brazilian reais (US$ 138,125). An Audi Q7 starts at R$ 277.300 (US$ 116,420) and a Lexus RX is priced at R$ 256.000 (US$ 107,477).
As in many other countries, SUVs and crossovers are the must have vehicle of the elite in Brazil. It is also the fastest growing segment, especially considering smaller models such as the Ford EcoSport and the Chevrolet Tracker. Without any consumer research, I can tell image counts a lot in this segment. SUVs make drivers look more powerful and richer.
There is still a lot of inequity in Brazil, where 10% of the population hold 43% of the country's income. Although Brazil does not have as many billionaires as China, Russia or India - according to Forbes, there are 46 billionaires in Brazil compared to 122 in China -, those who have money like to spend in very expensive goods. That explains why an entry level luxury vehicle is not the best seller in a brand's portfolio. The Audi A4 outsells the A1. The BMW 3-Series is the most popular BMW in Brazil, ahead of the X1 and the 1-Series. And Mercedes C-Class registrations are double those of the A- and B-Class combined.
Another of the Brazilian market characteristics that just cannot be explained through logic.
Augusto Amorim is senior analyst, South American light vehicle production forecast, IHS Automotive
Posted 20 January 2014