Brazil to have 100% flexible-fuel fleet by 2030

02 May 2007 18:33  [Source: ICIS news]

HOUSTON (ICIS news)--Brazil’s flexible-fuel vehicles will account for 100% of the country’s automobile market by 2030, significantly increasing Brazil’s domestic demand for ethanol, a consultant said on Wednesday.

Flexible-fuel vehicles now have a market share of 11%, but the figure will almost triple to 32% in the next three years, said Adriano Pires, a consultant with the Brazilian Centre of Infrastructure (CBIE).

Pires said Brazil will have 27m automobiles in 2010, of which 9m will be flexible-fuel running almost entirely on hydrous ethanol. Brazil’s current automobile fleet is 24m, he said.

“Flexible-fuel vehicles will be the main market for Brazilian ethanol in the future,” Pires said during a telephone interview in Portuguese.

The projection is in line with estimates by sugarcane industry association Unica, which on 25 April said Brazil's ethanol consumption will account for 60% of the country’s motor fuel demand by 2012, compared with 40% in 2006.

The association said ethanol consumption will soar because of continued growth in the flexible-fuel market.

Flexible-fuel vehicles, which can run on ethanol, gasoline or a combination of both, accounted for 83% of total auto sales in Brazil in March. The figure compares with 83.5% in February and 77.6% in March 2006.

Pires said nearly all automakers in Brazil now produce flexible-fuel vehicles.

Flexible-fuel production allowed companies like Volkswagen to regain market share from competitors that did not offer that alternative to their customers, he said.

Some Japanese carmakers that had originally insisted on sticking with gasoline-only engines changed their strategy and now offer flexible-fuel models, he said.

Brazilian production of flexible-fuel vehicles began in 2003, when 49,000 units of the model were sold.

In 2006, sales of flexible fuel vehicles stood at 1.43m units, a 76% increase from 2005.
By: William Lemos
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