There has been lots of attention paid in recent months and years to the explosive growth in production and demand in India, China, and Mexico.  Russia has remained a largely untapped market that for whatever reason is not attracting much attention from Canadian suppliers.  But what about Brazil???

Brazil has a very strong production base and consumer demand, yet it seems like only now are companies waking up to the opportunities in this market.  Canadian companies should realize that working in Brazil has the potential to be easier than in Asia, in part because you are at least in similar time zones.  Brazil also brings about the perk of having an extremely rich diversity of OEM's - success in Brazil might open the doors for a supplier in future markets down the road (Europe or Asia anyone?).

There are nonetheless a few challenges of which to be mindful:

• Import tariffs: Brazil recently announced a planned hike in tariffs on vehicles from 32% to 62%; to escape tariffs, vehicles need 65% local content.
• OEM diversity has the potential to equal lower production volumes per platform, making it a challenge to establish a beachhead in the market

This said, challenges are really just another way of finding opportunities, so here goes:

• Despite the recent slide in CAD/USD exchange rate, the dollar is still rather strong and it could be a good time to leverage it for investing abroad
• Mexico/Brazil are working on a free trade agreement that could potentially make expansion into Mexico a good starting point into Brazil - you could mitigate volume challenges by serving both markets

 In short, companies should ignore Brazil no more - EDC is happy to work with you on the country, as are our two representations in the country (Sao Paulo & Rio de Janeiro) happy to work with you on a market visit.

Disclaimer:

The views expressed here are those of the author, and not necessarily of Export Development Canada

 Les vues exprimées dans ce propos sont celles de l'auteur. Elles ne reflètent pas nécessairement le point de vue d'EDC.