BMW counts on Brazil’s economic rebound to boost sales

RIO DE JANEIRO, BRAZIL – BMW AG projects to sell significantly more premium cars in Brazil this year as it expects Latin America’s largest economy to emerge from the pandemic into a period of sustainable recovery.

The German automaker expects its sales in Brazil to increase 10% over 2019 figures as vaccination accelerates and the business environment improves. Year-to-date through May, BMW’s sales were up 50% over the same period in 2020.

“We believe in a rebound and our strategy, guided by digitalization and customers, has shown results and gives us the confidence to remain in Brazil,” BMW Brazil’s CEO Aksel Krieger said. “The business environment should improve and this means a much stronger future for us.”

Car sales plummeted 26.2% to 2.06 million units in Brazil in 2020, halting a 3-year growth period, placing the country as the 7th-largest global market in terms of sales.

Ford Motor Co. in January ended a century of car production in Brazil – closing 3 plants that employed 5,000 people – as part of a broader restructuring of underperforming operations.

In December, Mercedes-Benz ended its car assembly in Iracemápolis. BMW plans to keep its assembly plant in Araquari, Santa Catarina, able to produce up to 32,000 cars, although it is currently operating only at 30% of capacity.

BMW halted production in Araquari between April and May last year and turned to online sales, through Instagram, Facebook and a partnership with luxury e-commerce platform Farfetch Ltd.

“We have enhanced our digital side, much had been planned and the pandemic anticipated this,” Krieger said. “We covered 5 years in 1 on the digital aspect.”

Krieger attributes a future decision on investment in electrified models at the Brazilian plant to predictability and market demand. “The more this increases, the more it will help in a decision to invest in the production of electrics in Brazil,” he said, while providing no details.

Source: Bloomberg