Brazil Could Overtake Germany for World’s 4th Largest Car Market

This year Brazil could turn into the world’s fourth-largest auto market after cars have become more affordable for customers in this country. Local banks cut interest rates and eased loan terms, making purchases available for more car seekers.

In South America’s biggest economy, the pool of potential car buyers increased by more than 50 percent, said Guido Vildozo, an IHS Global Insight analyst, quoted by the Automotive News Europe. Both IHS and J.D. Power & Associates place their bets on Brazil becoming the world’s fourth largest car market in 2010, ahead of current 4th place holder Germany.

“Brazil is an emerging market, coming of age, and Germany is more of a mature market”, said Jeff Schuster, J.D. Power’s executive director of forecasting, quoted by the Automotive News Europe. “In terms of Germany, they overheated last year and now they are paying the price”, added Schuster. In 2009, Brazil had sales of 3.1 million vehicles, while Germany had 4 million.

This year, J.D. Power estimates that Brazil will reach 3.4 million and Germany will drop to 3 million, since the popular scrappage scheme ended. Europe’s number one economy may claim back the fourth place next year, only to lose it again from 2015 onwards, according to IHS.

J.D. Power has a different opinion however, the researcher estimating that Brazil will keep the fourth place after 2010. Brazilian sales of passenger cars and light commercial vehicles rose 28 percent in March to 274,487 units, according to a local industry group. Volkswagen led the market, followed by Fiat and General Motors. Brazil has a population of 208 million, while Germany has 82 million.