Opinion – Eduardo Sodré: Automakers need to spawn cars made in 2021, but sales disappoint

Opinion – Eduardo Sodré: Automakers need to spawn cars made in 2021, but sales disappoint

Advertisements for cars with inviting financing conditions and a guarantee of prompt delivery have appeared at the beginning of the year. It is a very different scenario from the one experienced during the second half of 2021, when queues and more expensive credit became the market’s rule.

Volkswagen, for example, offers the “zero tax” T-Cross compact utility vehicle. At Citroën, consecutive campaigns boost retail sales of the C4 Cactus. The explanations for these and other offers are in the law and in the numbers.

First, the law. The automakers asked and Ibama (Brazilian Institute for the Environment and Renewable Natural Resources) extended the deadline for adapting their vehicles to a new stage of environmental legislation by three months.

The rule established by the seventh phase of Proconve (Vehicular Emissions Control Program) provided that light cars produced from January 1st should emit less pollutants than models made in 2021. But there were incomplete cars due to lack of parts: without the extension, would have to be dismantled.

As far as possible, manufacturers accelerated production at the end of 2021. The collective holidays were delayed and December registered a good volume of production.

The pace continues fast: these cars need to be completed by March 31 and sold by June 30, and there is still the assembly of the 2022/2022 and 2022/2023 year/model lines. Then come the numbers.

A cutout on the passenger car and light commercial car segment shows that January recorded a 28.3% drop in sales compared to the same month in 2020. The data is from Fenabrave (entity that represents vehicle distributors).

February follows the same path, with a decrease of approximately 25% until Thursday (17) over the same period last year, according to Renavam (National Registry of Motor Vehicles).

Suddenly, some automakers have a small inventory of expired cars for sale. And there is a need to make room for the line suitable for Proconve 7 – which needs to be profitable to pay for the investments made in adapting to the new environmental standard.

It was this search for profitability in difficult times that made companies bet more on revenue for the dealership network than on sales to rental companies, which buy in lots and negotiate deep discounts.

Retail was hungry for cars, and the queues formed in 2021 are not over yet. But the results of this beginning of the year turned on the alert in the sector.

The omicron variant brought more uncertainty about the end of the Covid-19 pandemic and certainly influenced the drop in sales, but the country’s economic moment tends to be the main reason for the slowdown.

The current scenario combines high interest rates, inflation, unemployment and more expensive cars. If the consumer bubble that rocked the market in 2021 is about to deflate, problems could turn the expected rebound into a year of falling sales.

With the presidential election, the second semester tends to be compromised. At the same time, issues related to the supply of components are likely to be equalized.

The movements made by the brands show that the delivery of parts, mainly semiconductors, is more regular. Volkswagen, for example, will resume the second shift at the factory in São Bernardo do Campo (Greater São Paulo) on March 2nd.

But automakers – which have been making big investments with an eye on what the market will be like from 2023 onwards – may miss customers just when they are ready to deliver their cars without long queues.

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