Dealers want popular car, but not 100% ethanol – 04/04/2023 – Market

The 16.3% growth in sales of light and heavy vehicles in the first quarter did not impress Fenabrave (association of resellers). The entity is at the forefront of negotiations for the return of popular cars.

When presenting the market numbers this Tuesday (4), José Mauricio Andreta Jr., president of the entity, pointed out that the accumulated increase is due more to the bad results registered between January and March 2022.

Those months were impacted by a shortage of components and an increase in cases of Covid-19 due to the omicron variant.

471.6 thousand units were licensed in the first quarter – with a highlight for the month of March, which ended with 198.9 thousand licenses.

“The global increase was boosted by the difference in working days of the last month [23 dias] before february [18 dias]”, said Andreta Jr.

With the result, Fenabrave maintained its sales forecasts for passenger vehicles. The association believes that, this year, there will be no growth in sales compared to 2022. There is, however, hope that the scenario will change in the medium term with the return of popular cars.

“We are following the movement and we make data available to the government. For us, growth has to come from the bottom up”, stated Andreta Jr. “We need production scale.”

In Fenabrave’s view, the return of cars priced between R$ 50,000 and R$ 60,000 to the market will move stores and workshops. The association, however, does not support one of the points on the agenda: the return of cars powered only by ethanol.

“There’s no pressure [nas negociações] for the cars to run 100% on alcohol, but we want the use of this option to be encouraged”, said the entity’s president.

The idea of ​​launching popular models powered only by ethanol is related to decarbonization goals. In this case, the tendency is for vehicles to be more efficient: by adjusting the engine to a single fuel, it is possible to obtain better results in terms of consumption and emissions.

Andreta Jr. said that the evolution of production methods, with solutions that go beyond the traditional cycle of sugarcane, removes possible supply problems and price fluctuations.

“Hybrid corn already exists, which only serves to make ethanol, and can extract more alcohol from sugarcane bagasse. Without deforesting, it is possible to increase productivity by 30%”, said the executive, citing studies by Embrapa (Empresa Brasileira de Pesquisa agriculture).

“When considering the whole chain, what pollutes less is pure ethanol. The electric car has a market, but it will continue to exist in higher ranges”, said the president of Fenabrave.

The association of resellers, however, still does not have an answer on how it would be possible to encourage the use of ethanol in flex-fuel cars. Due to the price at the pumps and the performance in the tank, it is more affordable to use gasoline in most states.

The proposals under discussion range from reducing tariffs to granting credits or reducing taxes to those who put fossil fuel aside. According to Andreta Jr., these conversations are still in their infancy.

João Irineu, vice-president of regulatory affairs at the Stellantis group, sees the combination of ethanol with electrification technologies as a solution for the Brazilian market, which has cleaner energy sources than those available in Europe.

“Ethanol must be combined with different levels of electrification in a process that allows different configurations of hybrid propulsion, which can be distributed throughout our portfolio in an economically viable, environmentally correct and socially balanced way”, said the executive. “We want to promote accessible decarbonization at all levels.”

If a new tax line appears that encourages the return of 100% ethanol cars —whether popular or more expensive—, the Stellantis group already has a ready-made solution. In 2019, Fiat revealed the development of a highly energy-efficient turbo engine that only consumes hydrated alcohol.

Whether mono or bi-fuel, the success of popular cars desired by automakers and retailers is also linked to a fleet renewal program. Andreta Jr., however, stated that the plan mentioned this Monday (3) by the Minister of Finance, Fernando Haddad, has not yet entered the discussions.

“The idea of ​​renewing the fleet depends on removing the oldest car from the streets, and this has to go through a process for the government to buy”, said the president of Fenabrave, mentioning the use of options such as carbon credits to make this movement.