Middle-Class Wheels

"Underdeveloped country like hell!" proclaimed posters plastered all over Sao Paulo last week. Brazil's sixth national automobile show was in full swing in the city's exhibition hall at Parque Ibirapuera, and auto manufacturers were making the most of their opportunity to trumpet that in one decade Brazil has managed to develop a viable motor industry. As recently as the 1950s, Brazil spent $140 million a year to import autos; last year, because of increased domestic production and higher tariffs, imports amounted to $3,000,000. This year the country's carmakers will turn out 270,000 cars and trucks, show sales of nearly $1 billion, provide jobs directly or indirectly for 155,000 Brazilians, and contribute $267 million in taxes to the national treasury. In a nation of 83 million people, some 1.6 million own cars.

The Volkswagen, manufactured in Sao Paulo, has long been Brazil's most popular car, but the automaniacal middle class is already trading up. At this year's show, Volkswagen introduced a four-door 1600 model sedan that will sell for $3,733 v. $2,666 for "the beetle." Similarly, General Motors showed off the Opala, its first made-in-Brazil sedan, a cross between the U.S. Chevy Nova and the German Opel. Depending on the model, it will sell for $4,250 to $4.800--about twice as much as a similar car made in the U.S., where taxes are lower. Ford's trade-up entry is the compact Corcel ($3,436). The highest-priced car at the show is the Brazilian Ford Galaxie LTD; at $9,546, it is the country's newest status symbol. Chrysler, which along with the other three companies accounts for 92% of all auto production, is waiting until 1970 to present a Brazilian Dodge Dart. This year the company did not offer new models; it merely spruced up its Simca Regentes and Esplanadas.

Service Stations Too. Almost inevitably, the auto boom has brought problems along with progress. Petrobras, the state oil company, has long hoped to supply all of Brazil's petroleum from domestic wells. But the rising statistics of auto ownership obliges Brazil to import about 50% of its annual supply. The $260 million oil bill that car drivers run up more than offsets the savings on auto imports. As such, it is a primary factor in the country's painful balance-of-payments deficit.

Since auto insurance recently became mandatory, 200 companies have begun doing $67 million worth of business a year. Auto advertising is also increasing. Everywhere there is a big buildup of service stations. The country does not have enough first-class roads and is undertaking an expensive program to build 8,000 miles of highway. But until these roads are completed, mammoth slowdowns will persist. On one sunny Friday, the rush of cars from Sao Paulo to the beaches resulted in a 50-mile traffic backup.

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