Brazil Emerges as One of Mexico's Biggest Automotive Competitors, an Industrial Info Market Brief

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Brazil's pending free-trade agreement with the European Union (EU) is expected to create tough competition for Mexico's automotive market. While Brazil does not charge tariffs for cars and auto parts made in Argentina and Mexico, the nation imposes a 35% tariff on cars, and between 14% and 18% for auto parts, from the EU.

South America's Mercosur trade block, which includes Brazil but not Mexico, will phase out its tariffs on European cars, auto parts, chemicals, clothing, footwear and pharmaceutical products over a five- to 10-year period, according to a free-trade agreement reached last Friday between the EU and Brazil.

Brazil exported $5.14 billion worth of cars in 2018; its main destinations were Argentina (74.4%), Chile (7.2%), Colombia (5%), Uruguay (3.4%) and Mexico (2.6%).

Industrial Info is tracking 222 operational auto plants in Brazil, with 1,662 functional management contacts, as well as 336 capital and maintenance projects worth $9.45 billion in the automotive sector (including major auto producers and suppliers). Click here for a list of plants. Click here for a list of projects, and see graph below for a breakdown by state.