Flex Fuel Zooms in Brazil
28 October 2004
Reuters. Brazil has seen a stunning ramp up in the sales of flex-fuel cars—vehicles that burn either ethanol, gasoline or a combination of the two.
Although Brazil is the world’s top ethanol producer, sales of mono-fuel ethanol had cars plummeted from 94% of total sales in 1984 to less than 1 percent of total sales in 2000. The reason? An ethanol shortage in 1989 left drivers high and dry.
The arrival of flex-fuel vehicles, along with rising oil prices, has changed the situation dramatically.
But gasoline price hikes caused by rocketing oil prices and the arrival of flex-fuel cars, which owners say perform better than their older cousins, have now lured Brazilian drivers back to ethanol—some 40 percent cheaper than gasoline.
Launched in Brazil in March 2003, flex-fuel cars had grabbed 30 percent of new car sales by this September and are expected to take half the market next year, the National Association of Vehicle Manufacturers estimates.
Most major car manufacturers in Brazil already produce, or are planning to introduce, flex-fuel cars of various designs, with at least one analyst predicting that in three years flex-fuel cars would make up 100 percent of new car sales.
And, with gasoline prices soaring and air pollution from fossil fuels a growing concern, sales of those vehicles could spread to many parts of the world, especially in countries where sugar cane is grown.
That’s fast, even allowing for some fuzziness in marketing numbers. A piece by the Associated Press in August pegged flex fuel sales from January through July at 18% of total sales. Analysts are predicting a 2.1 million unit (total) year for the Brazilian auto industry this year.
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