The president of Volkswagen (VW) in Brazil, David Powels, has reportedly confirmed with regional media that VW is working on a new platform for four new global vehicles, two of which will be exclusive for Brazil. The new platform is reported to be called MQB zero and the vehicles include a small sport utility vehicle, small pickup, and a compact. The president also confirmed that the new vehicles will be assembled in Brazil, although the company is still determining which plants will receive the new products. Additionally, media reports say that VW is working to improve the efficiency of its Brazilian plants and suppliers looking to move its production operations to be among the top 10 most efficient worldwide within five years, compared with a ranking of 20th and 25th today.
Significance: Brazil has been a difficult market for all, with VW among the brands seeing market share decline along with volume decline. In 2014 the company sold 590,475 vehicles in Brazil, for market share of 17.7%. In 2015 this fell to 378,146 units and 15.2% share. IHS Automotive forecasts that VW's share will fall to some 14% in 2016 as the market is forecast to see another significant decline in sales. VW's share is very similar to that of General Motors and the two often switch second and third sales positions. Fiat Chrysler Automobiles retains the position of largest seller in the country, although all three are losing share. As a result of market conditions, VW has been pulling back its production as well, dropping from 577,172 units built in Brazil in 2014 to 359,847 in 2015. We forecast that production in 2016 will take another nosedive, before increasing again in 2017.
