Brazil Flexfuel Market Estimated To Witness Growth Due To Rapid Urbanization & Rising Purchasing Power
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| Brazil Flexfuel Market |
The Brazil Flexfuel Market is estimated to be valued at US$ 19.83 billion in 2023 and is expected to exhibit a CAGR of 7.2% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Flex-fuel vehicles have an internal combustion engine that can run on more than
one fuel or a mixture of fuels. In Brazil, flexfuel vehicles are designed to
run on any proportion of gasoline and hydrous ethanol fuel (E100), giving
drivers the flexibility to choose the fuel based on need and availability. The
use of ethanol fuel in flex-fuel vehicles reduces petroleum consumption and
greenhouse gas emissions.
Market Dynamics:
Rapid urbanization in Brazil has led to increased ownership and usage of
private vehicles for mobility purposes. According to IBGE, over 84% of Brazil's
population resided in urban areas in 2020, up from 76% in 1990. The rising
purchasing power of middle-class households has further increased the demand
for cars in the country.
Growing environmental concerns and government policies supporting renewable
fuels have boosted the production and usage of ethanol fuel in Brazil. The
Brazilian government has implemented several initiatives like lower tax rates
for ethanol to increase the blend and promote the adoption of flex-fuel
technology. Ethanol fuel is primarily produced from sugarcane in Brazil and is
priced lower than gasoline, providing economic benefits to consumers. These
factors have accelerated the sales of flex-fuel vehicles over the past decade.
Political: The Brazilian government offers tax incentives and subsidies to local automakers for producing more flexfuel vehicles. It has also mandated that all new cars sold in the country must be flexfuel enabled in a bid to reduce oil imports.
Economic: Brazil is the second largest producer and consumer of ethanol fuel worldwide. Flexfuel vehicles help utilize the country's vast ethanol reserves and insulate customers from volatility in international oil prices.
Social: Brazilians prefer flexfuel vehicles as they give more choice at the fuel pump between cheaper ethanol and gasoline. This flexibility is valued in a country with stark socioeconomic inequalities.
Technological: Automakers have gained expertise in seamlessly integrating flexfuel capability in both gasoline and diesel engines. Drivers can conveniently switch between fuels without noticing any major change in performance or mileage.
Key Takeaways
Brazil Flexfuel Market Demand is expected to witness high growth, exhibiting a CAGR of 7.2% over the forecast period from 2023 to 2030, due to increasing production and sales of flexfuel vehicles in the country. The market size is projected to reach US$ 19.83 billion in 2023.
Regional analysis indicates that Southeast Brazil dominates the flexfuel vehicle market due to a higher concentration of sugarcane cultivation and ethanol production facilities in states like Sao Paulo and Parana. Ethanol derived from sugarcane is cheaper and readily available, driving adoption of flexfuel cars.
Key players operating in the Brazil flexfuel market are Subaru Corporation, Chery Automobile Co. Ltd., Fiat Chrysler Automobiles, Ford Motor Company, General Motors Company, Honda Motor Co. Ltd., Hyundai Motor Company, Renault SA, BMW AG, Daimler AG, Nissan Motor Co. Ltd., Mazda Motor Corporation, Mitsubishi Motors Corporation, Toyota Motor Corporation, Volkswagen AG, Lifan Industry Group, BYD Auto Co. Ltd., JAC Motors, Changan Automobile Co. Ltd., BAIC Motor Corporation Ltd. Local leaders like VW, Fiat and Ford manufacture a majority of their cars in Brazil as flexfuel to tap the huge potential.
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