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There is a buzz around Porsche these days caused by the rumors that it would challenge Tesla with high-end electric vehicles. But down in South America, the German brand is making news for another reason: it is creating its own national sales unit in Brazil, the first in Latin America and only the 18th around the world.
Since 1997, Porsche vehicles have been imported to Brazil via Stuttgart Sportcar, a local company that now is part of the joint venture that will be dubbed Porsche Brasil, based in the city of São Paulo. Currently, Porsche Latin America is a subsidiary of Porsche AG based in Miami, described by Porsche as “the gateway to Latin America.” From Miami, the company “supports a network of 16 importers and 46 locations in 22 countries.”
Through Stuttgart Sportcar, Porsche has sold 7,330 units in Brazil this century. In the recent past, Porsche had registered only 791 units last year, a drop of 27% from the 1,085 cars and SUVs that started circulating in Brazil in 2013. That year was stellar for the German brand, skyrocketing 75% while the luxury market grew 39%. Last year, premium models registrations were up 18%.

In a country the size of the continental United States, Porsche has a tiny dealer network. There are only seven point-of-sales, in the richest cities. Stuttgart Sport car owns four stores; another local group has the other three. Porsche Brasil has announced it plans to gradually increase the network.
A more extensive dealer network is key to increase volumes, but controlling sales is important, too. It is very common that a company entering Brazil finds a local partner to later take the reign of the business. And this happens in all industry, from fashion (Diesel has done that) to cars. Brazil is a complex market and local partners know their ways without spending tons of money doing consumer research and hiring lawyers, for example.
In the automotive industry, both mass and luxury brands have preferred this route. Hyundai, for example, now has two factories and two different dealer networks in Brazil. Imported vehicles are sold by its long-time importer, who also builds SUVs and commercial vehicles, while the Koreans manufacture the HB20, the make’s highest volume product, sold in a different network. JAC is building a plant in Brazil with the group that originally imported and built the brand’s image in the country.
Registrations of Jaguar products soared 458% in 2013, after the company incorporated its operations in Brazil – in 2012, only 53 units were registered. Last year, the rhythm fell to 29%, but still 11 percentage points ahead of the total luxury market.
It is still early to forecast if the operational change will help Porsche. Our light vehicle registrations forecast accounts for figures similar to the 2014 volumes, in a market that is poised to plummet 8%. This year will be the Macan’s first full year of sales, and the SUV is expected to remain the brand’s best seller. In January and February, Porsche’s registrations dropped 29%, in a market down 22%. Overall, luxury products fell only 8%.
Augusto Amorim is senior analyst, South American light vehicle production forecast, IHS Automotive
Posted March 18, 2015

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