Brazil: overview of interesting market developments

02.09.2008 By: Transfer Consultancy

Brazil has a very dynamic and fast growing economy. Even though there is an international crisis in the credit markets, both Brazilian and international companies keep investing in the country. Read more about several interesting sector developments.

Suzuki Brasil
Based on the worldwide expansion plan, the Japanese carmaker decided to return to Brazil to dispute the fast growing car market (in 2007 more than 2,5 million cars were sold). The president of Suzuki Brazil announce that the company returns after 5 years with a lof of confidence. In 2003 the company retreated from Brazil due to currency problems. In October 2008 Suzuki Brazil will launch the Grand Vitara. The company plans to sell a minimum of 600 cars a month through its relaunched dealer network. Car makers in and around São Paulo are investing in new assembly lines and several component suppliers report an increasing demand for car parts.

Wal-Mart starts internet sales in Brazil
In October 2008 Wal-Mart will enter the e-commerce sector in Brazil. The company defines its step into e-commerce in Brazi as a 'historic' move. In practice this means the start of fierce competition with among other retailers Casas Bahia and Carrefour. The interest of these retailers in the e-commerce sector has an explanation. For 2008 a turnover of R$ 8,5 billion is expected, a growth of 35% compared to 2007. The traditional commerce increases approximately 'just' 10% per year.
Another interesting development concerns the popularity of internet television that is growing worldwide at a fast pace. Wal-Mart will also try to make use of this new marketing channel. Estimates by the Gartner Research Institute show that at the end of 2008 some 19,6 million clients will use internet television worldwide. This number is still relatively low as technology is in continious development. But is shows a growth rate of 64% compared to 2007 and especially Brazil is expected to show a high level of acceptance, among other due to the strongly improved internet access.

Petrobras announces new oil discovery
Brazilian Oil company Petrobras announced on the 26th of September that it discovered oil in the Santos bay. Petrobras again found oil in the BM-S-40 block, 2.600 meters deep. Preliminary estimates appoint a volume of 150 million barrels of petroleum and gas.

Naval construction sector gets impulse
The Brazilian government recently created FGCN, a guarantee fund for the naval construction sector. The objective of the fund is to solve the problems of credit access for the ship building industry. The law that defines the fund establishes a limit of R$ 1 billion for FGCN. It will guarantee a positive development for this sector, where the demand for especially river transport boats stays high.


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