South America poised for big automotive growth: IHS

The South American automobile market will grow significantly by 2025, becoming one of the top three growth markets globally for light vehicle sales, according to a forecast by IHS Automotive.

The Englewood, Colo.-based automotive industry watcher forecasts nearly 2.3 million additional vehicles will be sold in South America by 2025, equal to the output of 10 modern assembly plants. Most of the growth will occur in Brazil, followed by Argentina and Colombia.

Brazilian lawmakers late in 2012 enacted legislation providing tax benefits for improved vehicle efficiency and reduced carbon emissions. Brazil Ministry of Trade and Industrial Development (MDIC) hired IHS Automotive Consulting to help them understand the growth potential under the new law and provide guidance on how Brazil could significantly improve the fuel efficiency of Brazilian vehicles and reduce CO2 emissions by 2017.

“The new automotive regime will promote green technology, help Brazilian consumers by significantly improving the fuel efficiency of light vehicles and, in the process, make Brazilian vehicles technically competitive with those in Europe, the U.S. and Asia,” said Paulo Cardamone, Managing Director, IHS Automotive Brazil. “Brazil can become a net exporter of vehicles in the not too distant future.”

There will be a significant increase in demand for green technologies to support Brazil’s new program for Incentive of Technological Innovation of the Production Line of Automotive Vehicles (INOVAR-AUTO), Cardamone continued, with key technologies like direct injection, turbo- and super-charging, stop/start, advanced multi-speed transmissions, roll resistant tires and light weighting expected to be in demand.