Light commercial vehicles are becoming the first preference of Brazilians over passenger cars with increasing road connectivity and emerging middle class.

According to “Brazil Automobile Industry till 2010”, a new research report of RNCOS, the Brazilian automobile industry gets a big chunk of revenue from passenger cars sale, testified by the record sales of passenger cars in 2006. But despite of record passenger car sales in 2006, the segment still has a vast scope for growth considering that the penetration rate of passenger cars per thousand people is very low.

The report also identifies that in the last few years, poverty level has declined in Brazil, leading to emergence of ‘lower middle class’ families. Surprisingly, the earnings of the middle class families are surging at faster rate than rich families; consequently, they are spending money on buying personal vehicles and consumer durables. Moreover, easy access to financing packages and increasing connectivity between rural areas and metropolises is also driving the automobile sales in the country.

However, the report anticipates the Light Commercial Vehicle (LCV) segment of the Brazilian automobile industry to grow at a CAGR higher than that of the passenger car segment during 2007-2010.

The report said that rural populace of Brazil, an agriculture-based country, largely depend on LCVs for transportation of goods and commutation. It has also found that development projects are enhancing the interconnectivity between rural-rural and rural-urban regions, making people to use modern vehicles for transportation (especially LCVs). Hence, being small in base and experiencing strong demand, it is projected that the LCV segment of the Brazilian automobile industry will overtake the passenger car segment during 2007-2010.

Furthermore, the government’s support to develop ethanol/flex fuel driven LCVs and increasing preference for green fuel vehicles by people, as cited by the RNCOS research, is influencing the production volumes of LCVs in the emerging country.

LCVs are just a segment of the “Brazil Automobile Industry till 2010” that provides comprehensive information on Brazil’s transportation system, including trucks and buses. It updates on current market trends and how the future of the industry will look like. It also studies key driving factors, including import-export scenario, and the auto-component industry, pushing growth in the Brazilian auto industry, and covers study on key issues impacting the industry.

About RNCOS:

RNCOS, incorporated in the year 2002, is an industry research firm. It has a team of industry experts who analyze data collected from credible sources. They provide industry insights and analysis that helps corporations to take timely and accurate business decision in today's globally competitive environment.

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