Interesting information can be derived from this article : “Cars made in Brazil are deadly” .
The summary of the article is “The cars roll endlessly off the local assembly lines
of the industry’s biggest automakers, more than 10,000 a day, into the eager hands of Brazil’s new middle class. The shiny new Fords, Fiats, and Chevrolets tell the tale of an economy in full bloom that now boasts the fourth largest auto market in the world.”
First of all the growth – or the greatest growth rates in auto purchasing is in the “developing third world“. Read China, India , Latin America including Mexico & Brazil. Secondly while the major “Big 3″ – GM,Ford & Chrysler – would be expected to be in these markets – as standard players with product and expertise – smaller players like French Renault & the Chinese with export model low entry variants abound. Add to the mix of course the Japanese Toyota etc & South Korean car producers. Secondly profit margins are very high – 10 % versus 5 % globally and 3% in the USA. Yet accident rates are 4 times as high in Brazil as on American roads. And these accidents are not just fender benders but are much more lethal and disfiguring. While it may be said that the culprits are the poor roads of Brazil and 3rd world countries and the driving habits of the locals – the lack of safety features and especially poor body frame integrity can be held as a most major feature. Interestingly , aside from lack of automobile safety laws its the price of power bills that can be said to be the most factor ,.
Its often been noted and said by business people in the 3′rd world & Mexicans that large companies dump old and expired goods on markets such as Mexico. Areas of the Mexican Yucutan are not only noted for their beautiful beaches & fishing tournaments , historical sites such as the Mayan Ruins of Chichen Itza, restaurants - but also a good place for large retail operations and big box stores to “dump goods“. Its possible to sell old unwanted product , marketing mistakes and auto sales by export sales – selling excess goods on these markets and consumers. True they get value and bargains & access to goods and services that these “poor people” might not otherwise have.
Yet many of the “entry level vehicles“ that are sold into Brazil are downright unsafe yet they make good money for those who make and sell them . While its true that Brazil has few auto safety rules and that basic safety features in cars that have been commonplace in the “industrial world” for years are not installed nor is it required they be in Brazil and other similar markets. Read air-bags , ABS brakes, crumple designs and the like. True the auto makers are following the rules. Yet most entry level cars here yield only one star put of five in vehicle accident tests and are rated poorly. What is a minor walk away accident are killers and maimers in Brazil & such other driving /auto sales markets as Mexico.
Interestingly one of the major factors that come into play in terms of solid car and vehicle safety in collisions are the amount of “spot welds” and welding leading to body integrity or lack there of. The dangers and weak points come down to basics themselves. Lack of body reinforcements , the use of lower quality steel metals in car bodies and lastly weaker or even fewer weld spots in the auto making and auto manufacturing processes themselves. Essentially put “The secret of a car’s body being able to withstand real world accidents and collisions ( and the values measured in industry and road safety authorities crash tests) are the weld spots“.
This brings us to last powerful determinant . In a practical sense its the price of electricity and power bills. While power may be cheap – even if derived from hydro water dams, its the price of delivery and transmission that is a major component of the actual price and cost of power delivered to consumers and the manufacturing industries. 20 % of the cost of building cars overall ( at least in Brazil) is the price of power. Hence fewer & not as good spot welds are the result. Saving welding costs can substantially increase profits on the production line and lines. Its as simple as that. Yet there is no disputing that entry level vehicles being sold into these markets are downright dangerous and need not be. One company VW is to praised for maintaining global standards on welds on its products globally.
In the end it can be said that what was the situation in the US in the 1960s is playing out in the 3rd world and developing countries. The role of the automakers is to make product and profits. They are observing local laws. Yet over time and consumer demand auto safety legislation and standards will most likely develop and come into play. Its better and more solid both for auto owners, their passengers , their communities and also the auto makers who will better and more long term solid markets.