Previously this weblog illustrated the 'mainstream' of mass mobility passenger car offerings from primarily VW and FIAT the biggest auto-players of the 1970s, 1980s and 1990s/2000s. Others such as Ford and GM (the Americans) remained in situ from the earliest days but operated within Brazil tactically more than strategically. Whilst others such as the French (Renault, PSA) and Japanese-S.Koreans (Toyota, Nissan, Hyundai) entered only after the early 1990s and demonstration that production and sales was viable upon the remaining market share below Italian-German domination.
However, equally fascinating, and more so from the cultural-entrepreneurial standpoint, is the realm of the 'niche': those companies established by aspirational (if relatively small-fry) Brazilian industrialists.
4. Indigenous Development – Independent (Niche)
These enterprises were obviously born from the confluence of personal and national economic ambition.
With the known planned contraction and eventual exit of state ownership with 'FNM' (licensed trucks and cars)[see earlier] by the early 1970s, and so no direct Brazilian interests and so leverage within large scale vehicle making, an informal political will promoted a lassez-faire 'open-market' environment.
This aimed at those well engrained business families, entities and individuals who could be drawn into the auto-sector on a small production, high-value basis; with critically the promise of “expected sales”, short-hand for mutuality beneficial arrangements.
Behind this new openness to enterprise was the need to promoted and nurture domestic commercialism which itself sat upon the need for “alternative” (ie non-mainstream) engineering and production capabilities across various niche product types; expanding the learning and application from the first Brazilian sportscar – the Interlagos of 1962.
The outcome was a slow trickle of entrepreneurs imed initially at wealthy private buyers seeking fashionable sportscars, thereafter directed toward B2Butilitarian and specialist business demands, and by the early1980s value-concious utilitarian private users.
Having realised the mass-mobility aspect of the previous, culturally engrained “Estado Novo” economic plan, it was time to drive expansion into realms which, though not as grandiose, created vital internal learning about alternative and new materials, engine technologies and construction methods that could possibly provide a leap of learning. One which if deemed necessary could be easily replicated nationwide if internalised self-reliance was ever though necessary again. To this end Brazil, back in the late 1960s, recognised the potential economic power of what is now called 'Micro-Factory Retailing'.
However, to better serve itself within the global free-trade ideology, Brazil rightfully retained and grew industrial relations with the world's major auto comapanies.
Nonetheless, within 'niche' Brazil's efforts, from the mid 1960s onwards spanned 4 primary vehicle segments:
Effectively an organically evolved licensed manufacturing and badge-engineering deal between France's Alpine and America's Willys-Overland. The Interlagos is seen as Brazil's first proper sportcar.
It was named after the race-track in Interlagos, Sao Paulo, and was launched after much of Latin America itself had been entranced by long distance rally motor-sport high, absorbed by the travels and travails of famous participants (such as Juan Manuel Fangio) on the Pan-Americana and Mar y Sierra races.
Based upon the 1962 Alpine A108/110 sportcar of France (itself using Renault components before its 1973 take-over) the business plan was to compete against the upcoming Brazilian produced VW Karmann Ghia; with the advantages of similar looks and greater performance. Thus would have to come in coupe and convertible models, whilst a fastback 'berlinette' would also be made serving as the pinnacle of the range.
Willys-Overland Brazil had been licensed manufacturers of the earlier Renault Dauphine which itself was much of the technical basis for the Alpine, so at the end of that contract and without agreement regards the Dauphine's replacement (the R8) it was an obvious decision to utilise the knowledge gained to date to compete against VW with a low-cost 'BOM' (Bill of Materials).
The imported Alpine backbone frame was mated to a locally produced fibreglass shell using replicated moulds and tooling. Unlike the mass manufactured VW counterpart which had the finanical strength directly related Fusca income to balance-out the costs of the transplant project, the Willys-Overland structured its business template differently. Whilst it did indeed produce Jeep products locally (CJ and Station Wagon) it chose not to financially enmesh 4x4s and Sportscars.
Instead self-financing economics meant that a lean-manufacturing approach was put in place to reduce costs as much as possible. Thus the Interlagos Belinette was initially produced on an order by order basis so containing purchase expenditure and the 'dead' cost of stored inventory on parts, yet pragmatically did use flexible labour from the main Jeep production line to likewise contain labour costs.
It was a very necessary (typical niche-car) commercial basis which whilst innately spasmodic in both orders, deposits, production flow and receipts did allow for activities to slowly expand.
Thanks to much publicity, its mix of race-track provenance and on the road status the car became a Brazilian celebrity in its own right; its high-revving small engine, all round independent suspension and all-road disc brakes all advanced for the period and very much in the Brazilian modernist spirit of the era.
In total 822 Interlagos were built in the four years between 1962 and 1966 (whilst in stark contrast of approach and longevity VW built over 41,000 units of the Karmann Ghia).
Like its predecessor, this vehicle was a milestone for Brazil, demonstrating its growing capabilities, if not its absolute independence.
Moving on from simple badge-engineering, it was a cosmetic adaption of the small yet convincing German DKW Malzoni – of the Auto-Union group - itself a sportscar born from original 'People's Car' roots.
As deemed necessary a formulaic new offering was provided so as to balance market acceptance and technical and cost feasibility, so the aesthetic changes made drawn from similar bigger European sportscars of the era (Ferrari, Lotus, TVR, Ginetta etc). However, underneath the Mk1 was effectively all German, with a small 3 cylinder in-line Auto-Union derived engine driving the rear wheels (actually an improvement over the 2-pot version).
As part of the national export drive in the early 1970s the Mk2 bodystyle was created with fundamental mechanical changes. The DKW engine became defunct as Micro-Cars fell-out of popularity in Europe, and in came the obvious choice of the VW boxer engine. To further same costs it remained mated to the VW gearbox and half-shafts, and thus retained its standard rear mounted position. Thus the Puma GT in Mk2 guise became rear engined. The curvaceous 1960s front remained with small alteration, but married to to a new angular 1970s Kamm-tail rear, akin to Alfa-Romeo Spider, but primarily used to provide good engine air-cooling.
It was exported in assembly (ie part finished) form to the USA and Canada. This done to overcome North American import regulation regards imported vehicle emissions. However, whilst the task of completing the car by installing the engine, gearbox and some ancilleries was not physically onerous to any American/Canadian distributor, it vitally did not meet with the general mindset of the generally wealthier personal-car buyers who were conservative and so concerned about a number of fundamental issues, such as possibly loosing the down-payment required if any such company went prematurely bust, exactly which company (US agent or Brazilian exporter) had ultimate responsibility for mechanical faults, or simply the status anxiety of driving what was deemed “something flash on the cheap”.
Thus whilst the Puma was successful at home as the natural latter-day substitute to the original VW Karman Ghia, the complications of export procedure, higher North American domestic competition and high so product expectations, meant that it could not fulfil a similar role abroad.
As such its stayed uniquely Brazilian and underwent various cosmetic and technical evolution over its long lifespan.
To try and gain as much immediate cache as possible the makers of this car unabashedly plagiarised its name from the landmark 1966 Lamborghini Miura. Like Puma, the first series vehicle of 1977 was based upon a VW Type 1 rolling chassis.
It was designed in the Euro-wedge sportscar style, itself modernist shorthand for the “futuristic” and so notionally advanced, which mechanically was hardly the case. However it was aesthetically successful with a rear that appeared that of an updated VW SP2 and rear deck flying buttresses (a la Maserati, Ferrari and Jaguar XJS) providing a strong archetype cohesion to the long low nose with pop-up headlights. Even the use of faux bumper crush side panels (a la Porsche 911 for US Federal safety regulations) was well integrated and matched to the C-pillar air-intake.
With the discontinuation of the VW Fusca the base rolling chassis became unavailable, thus the later series cars were re-engineered with use of a tubular space-frame with installation of a water-cooled front mounted engine. This fundamental change was accompanied with much altered front and rear treatments of the later generation vehicles through the 1980s to keep abreast of prestige European styles (ie Porsche 944), American styles (Corvette C4) and to provide overtones of the successful Japanese performance models (Toyota Supra).
Miura as a company ran between 1977 and 1993, but with a business model based on the disposable income whims of elite Brazilians, the volatile procurement of 'as available' parts and rapidly changing style trends, there was a constant need for financial and technical juggling.
Critically, it appears that Miura's end came when the major car makers located in Brazil sought themselves to take advantage of the initially slowly expanding 1990s economy, and thus themselves and their closely coupled suppliers possibly decided to run-down and eventually stop supply of vital components.
Nonetheless, under what appeared relatively constrained circumstances over 16 years (though arguably much protected by import ban policy) the Miura company's ambitions and achievements meant much to the auto-culture of Brazil.
As explained previously, Brazil's initial notion 'luxury' car was the FNM 2000 'JK', ironically a state sponsored badge engineered product stemming from a failed private enterprise initiative, via licensed production agreement with FNM's then part owner Alfa Romeo of Italy.
By the mid 1970s the FNM 2000 had ended its product life-cycle, whilst the luxury 2+2 personal car segment had become well established in the USA (originating with the Ford Thunderbird through the 1960s) and had more recently begun to become prevalent in Europe with the popularity of GT cars and primarily the option of 2 door versions of 4 door premium and luxury cars (from the BMW 2002ti and Turbo through to the later Maserati Bi-Turbo and era newcomers such as Germany's Bitter).
Given this foreign dynamic for the upmarket 2+2 and the domestic luxury segment replacement seemingly required, a company named Companhia Industrial Santa Matilda decided to try and create a similar Brazilian market space.
Established in 1916 the Rio de Janeiro enterprise had grown across various industrial sectors to become a Brazilian conglomerate including production of railways carriages, rail-freight cars, tractors, farm equipment and various galvanised steel and fibreglass products. Thus the company had at least the prime material resource and affiliated broad engineering knowledge.
Launched in 1976 the car wowed the crowds at the Sao Paulo Auto Show, illustrating that Brazil could create of its own. Its design brief was to adopt of design cues from a mixture of foreign premium cars so as to be taken seriously, yet provide a simpler list of comfort and convenience features so as to reduce build cost and so showroom price and maximise profitability.
Indeed, the Companhia Industrial Santa Matilda now doubt saw its introduction as very timely given the bankruptcy of Maserati in 1975, thus leaving possible market opportunity in Europe and North America; this not to be realised though.
Known as the SM4.1 the car was produced between 1977 and 1997 in coupe, removable hard-top and convertible forms (a la Mercedes SL) using a GM-Brazil sourced engine (from Opala) installed into its fibre-glass body. It underwent 5 successive generations and styling and technical changes. Its boxy 2-door shape was not obviously derivative from any other marque, but was quite generically Amero-Japanese in styling (GM-Mitisubishi).
The apparent business plan appeared that of seeking to be the very niche but distinctly sought after , in essence the 'Brazilian Bristol' (as per the British luxury marque and with similar proportions [if not overall size] to the Bristol Bleinheim-Beaufighter coupe). And though produced in low numbers this rarity and 20 year longevity gained an immediate and long-lasting iconic reputation.
The Dacon company's origins was as the best known Brazilian importer and distributor of VW, Audi and Porsche vehicles. During the 1980s it sought to grow its per unit margins by creating higher performance and cosmetically enhanced specials, typically on the Passat / Pointer.
This was commercially successful (these vehicles latterly sought after 'retro' classics) which buoyed ambition to create Dacon's very own unique, individualistic and high-margin car project. The outcome was the Dacon 828, an attempt to create something city chic (and thus could be said to be a spiritual and formulaic forerunner to the later Aston Martin Cygnet).
With the Santa Matilda firmly in place as the large Brazilian luxury car by the early 1980s, Dacon believed it could create a new hybrid niche for “City-Luxury”.
As such it believed it could essentially shrink and re-proportion a revered luxury sportscar, with obviously (supposed) 'rationality' of the Porsche 928 given its franchise agreement with VW-Porsche at the time. Ansio Campos of Puma design fame was brought in to add project provenance and reputability. To position the car in the minds-eye of the potential buyer it was named 828, which together with its cosmetic treatment sought to create the impression of a smaller city sibling to the 928.
[To 'post-rationalise' the obvious nameplate marketing ploy, a rumour was created that the car was conceptually born in '82 and was Dacon's 8th development project; after a targa-top Passat, Porsche-tuned Brasilia and water-cooled SP2].
Accordant to the necessary niche technical solution the body structure consisted of reinforced fibre-glass and to maintain a compact powertrain the still ubiquitous air-cooled VW boxer engine, gearbox and half-shafts were utilised; providing good power to weight but intrusive NVH and thus hardly quiet luxuriousness. The general cosmetic theme of the Porsche 928 was achieved only from the mid-section rearwards and by deploying cost-conscious 'off the shelf' components to mimic 928 detailing, such as the use of a Bay-window Type 2's rear lamp cluster set horizontal and recessed in the rear panels. The front of the car however had no similarity to a 928 and thus lacked much of its raison d'etre. The wheels were originally 10 inch steels and Gordini-like alloys, thereafter replaced by a high cost dedicated effort of down-sized 928/944 wheels.
Despite much substantial early advertising the car was effectively only produced on a build-to-order basis, and was not successful, with reportedly only 40-something units manufactured between 1983 and 1992.
Nonethless, the basic miniture body-shell appears to have been modified time and time again by various parties with different supposed business visions, from the creation of a 'midi'-sized 928 with lengthened front and rear and appearing much like the Porsche, to renewed interest in the Luxury-City idea. The concern obviously as to whether these are real business enterprises (with their own pros and cons), or simply falsely generated projects to alleviate state or private investors of their finances with 'unforeseen early cash burn'.
[NB It should be noted that both cars 828 and Cygnet were commercial flops because of naïve over-simplification of the mini 'City-Lux' formulae. Indeed Aston Martin should have been much more intelligent regards its Cygnet effort and should have been aware of the Dacon case study].
To help cure congestion, assist low-cost mobility amongst the lower tiers of society, and promote a sensible 2nd car mentality, the Brazilian government long sought to promote the City-Car idiom. Indeed it hoped to replicate the market success of the original Fusca/Beetle, but with a smaller urban friendly footprint, seen as a friend to society at large.
This has set the tone for various attempts over time starting from the mid 1970s onwards, the firm of Gurgel being a prime actor in this realm.
Gurgel Itaipu E150:
Shown at the 1974 Sao Paulo Auto Show this was an all-electric city micro-car very similar to the conceptual efforts of many big and small US and European producers in the 1960s and early 1970s.
[NB Gurgel had started auto-production in 1969 with a fibreglass dune buggy type vehicle for military and leisure use, then expanded into similarly constructed heavier utility vehicles. With strong connections to Federal and State agencies it became the de facto indigenous niche specialist vehicle provider].
To meet the policy dream of low impact mobility the Itaipu was born and named after the hydro-electric power plant. Naturally, construction was largely fibreglass and thus lightweight, very necessary so as to off-set the 10 very heavy lead-acid 12V batteries which provided propulsion power; and to maximise the vehicle's travel range. (Three quarters of the overall vehicle mass was that of the batteries).
It was a trapezoidal monobox in silhouette to maximise interior space and so functionality, with flat pained acrylic and glass windows to reduce cost (a pragmatic solution later seen on the FIAT Panda Mk1's flat glass windows).
However, whilst seemingly advanced, the fact is that ultimately it had many social and technical shortcomings, ranging across: overt utilitarian look and feel unpopular with potential private buyers, overt rattle and squeaks from the structure and its fittings (this highlighted by silent powertrain), an odd clashing mix of dashboard instrumentation, the inability to travel longer distances, the time for electric recharge and the lack of electrical recharging infrastructure.
Ultimately the electric Itaipu's negatives outweighed its positives, but perhaps more than any other country with experimental EV's in the period, it helped alter the automotive landscape by prompting an e-version of an urban runabout van, ironically the acceptance expanded use of sugar-beat and sugar-cane sourced fuels (seen as alternative but far better than all electric), and helped set Brazil on its ecologically aware path leading eventually the Rio Summit Conferance.
Having been producing basic utilitarian vehicles for the military and general fleet purposes, and having dabbled with the EV, in its twelfth year Gurgel produced its first passenger car.
Recognising that the major mainstream players effectively owned the convention segments, it sought to create its own niche with a conventional looking, but unconventionally packaged small car.
The XEF was launched in 1981 using 3 members of the Brazilian football team in its advertising, so as to promote and acclimatise the public to its novel single row 'two and a half' seater arrangement. (This also seen in France's Matra Bagheera sportscar). Cosmetically the car appeared to be a cross-breed between a FIAT 147 and contenporary Mercedes 200, using the former's general slab sided, package efficient shape and the latter's secondary detailing regards rear lamp cluster and alloy wheels.
The constrained national economy through the late 1970s and 1980s due to renewed protectionism generated both high inflation and a captive market for Brazilian manufacturers. Hence the price of much from basic consumer staples to cars steadily rose, and even basic vehicles such as the VW Gol became unaffordable to many.
Founder Joao Gurgel sought to recreate the affordable 'people's car' and thus utilise the firm's knowledge of GRP, self-proclaimed invented 'Plasteel' and the small boxer engine format to do so.
The result was the BR-800, a small yet seemingly voluminous urban vehicle that seated 4 upon a short wheelbase. Many expected Gurgel to continue to re-utilise the epnymous rear mounted Fusca engine – as all had done before – but he instead chose to create a new 2 cylinder “boxer” (akin to the 2CV's or BMW motorcycle's) which mixed VW engine parts with newly designed Gurgel components. It was water cooled, which whilst against the grain in terms of cost and weight, aided greatly in stationary traffic on hot days whence the old VW boxer could overhead.
Interestingly the BR-800 was built within the Gurgal factory in Santa Claro using not the standard roll-down production line but via the 'karosel' method. A circular, hub and spoke contraption (akin to fairground carousel ride laid horizontal) the end of each spoke/arm with a fixed or rotational platform upon which the car was built-up. So occupying as small a space as possible and assisting the 'time and motion' efficiency of the overall build process
[NB This production template later used in advanced form by the European low-series specialist production houses, such as Karmann and Hueliez ].
The car was obviously heralded by government and national press. But a self-created barrier complicated the sales process and effectively doubled the ultimate contract price. (See summary below). And so with the BR-800 Gurgel gained a somewhat tainted reputation, that ultimately led to the company's decline.
[NB an irony is that Gurgel established his company from his profits as a VW distributor, whilst in his own 'people's car' he technically negated the use of a mechanical distributor].
Whilst the Gurgel Company started out as a distributor for Volkswagen's Type 1 (Fusca/Beetle) and Type 2 (Microbus), the success and profits enjoyed allowed it to move into, indeed create, a niche specialism in the utilitarian segment.
After creating a scaled-down child's buggy to effectively show proof of concept regards reinforced fibre-glass materials, the first true vehicle built by Gurgel was similarly a Buggy named Ipanema. Given the strong VW connection it was based upon VW Fusca/Beetle mechanicals.
[NB the Fusca base would prove the underpinnings of many of the company's offerings].
This was designed with dual markets in mind, a necessary primary one and a secondary aspirational one. Firstly to both serve the military as a cross-country reconnaissance and light task vehicle given Brazil's expansive borders and the need for basic military mules. Secondly to possibly export the vehicle to the USA where the dune buggy craze had begun, themselves fundamentally based upon the Fusca/Beetle rolling chassis. The beach theme led to the obvious name of Ipanema. To aid that ambition Gurgel's buggy would be given the face treatment of the 'grosser' Karman Ghia featuring distinct eyebrows over the front lamps, thus it was hoped the buggy would be viewed by American's as the natural sibling to the popular Karmann Ghia. However that export ambition was unrealised and the vehicle stayed within the ranks of the military and other typically commercial off-road users inside Brazil.
Gurgel Xavante (X-10 / X-12):
Whilst Ipanema was useful to the military, its bodyshell had its limitations in terms of innate structural strength and on-board functionality.
Thus an evolutionary product was launched in 1973 called the Xavante which with taller vertical sides and more horizontal top surfaces was far more akin to the likes of the VW Type 82 Kubelwagen and its latterday 1970s counterpart the VW 'Thing'.
Most important here is that the need for improved structural strength in compression and expansion led to the innovation that was “Plasteel”. Little is known about this but it is assumed that (as with the strengthening of concrete in civil engineering) that the fibreglass effectively sandwiched an inset steel mesh.
This proved useful in terms of stress endurance, local impact and against the general effects of UV (ultra violet light) weakening and chemical corrosion.
Although rear engined and so providing weight to the driving wheels, as a 2WD vehicle the Xavante had its limitations. To improve basic traction in low friction conditions the vehicle had 2 separate handbrakes for each of the rear wheels. When traction was lost on one wheel the brake could be applied to send drive through the open differential to the opposite wheel, thus acting as a form of very basic LSD (limited slip differential).
Gurgel X-15 / G-15:
In 1979 an FC (forward control) vehicle was offered, as either a 7 seater van or 2 seater truck, with other derivatives with varying passenger capacity and payloads. Initially used by the military and commercial fleet customers, the proven durability of the vehicle and its affordability soon attracted small business and even private buyers.
This model together with the Xavante was exported across Latin America and boosted Brazil's regional trade and diplomatic relations.
Gurgel Itaipu E-400:
The following year in 1980 saw further electric vehicle experimentation in a new aesthetically pleasing van, which itself drew from the cues of the likes of Mazda and Toyota vans of the period.
It was deployed to maintain the Brazilian policy of utilising alternative fuels (so as not to consumer its own oil reserves or become reliant upon unsecured foreign sources). Again as with the Itaipu car, its real intention appeared to be the policy drive for lighter cargo vehicles to switch to locally grown alcohol based fuel ('alcool').
The success of Japanese 4x4s from the mid 1970s onwards across global regions led Gurgel to create its own SUV, itself able to be pared-down given the renewed import protection policies of the period from more capable foreign manufacturers.
Without a proprietary 4WD system and with the prohibitive cost of engineering one and potential on-cost in sales price constraining sales, the vehicle was made available as a 2WD only.
It was recognised that this had not been a problem for the smaller Matra Rancho in the European leisure segment – Gurgel apparently viewing Matra as its prime influence – but realistically for a proper SUV the 2WD layout was limiting.
[NB the Rancho actually enjoyed better traction since it was front-engined and FWD, whilst the Carajas was front engined RWD. The use of a 'torque-tube' however helped transmit the rearwards power more efficiently, and itself suggested that Gurgel was looking to create a commercial arrangement with TATRA of the then Czechoslovakia, itself the torque-tube and AWD specialists, to probably create a Brazilian JV].
Nonetheless, even with only 2WD, and as effectively the only domestic option, the military and fleet bought the vehicle given the political bias in the 'closed door era' to Brazilian engineered and produced vehicles. It also sold to private buyers who wanted the status of an SUV but not full off-road capabilities. As with the cost-conscious programme roll-out of the original Land Rover Discovery (later in 1989), first as a 3-door vehicle with 5 door added later.
Aesthetically it was a mix of Toyota Land-Cruiser face, Land Rover Series 1 and 2-like hood-mounted spare wheel, enlarged Rancho-like sides and proportions, and used initially VW 'bay' rear lamp sets, replaced by Jeep Wrangler like clusters in later generations.
As a protected species, between 1985 and 1990 it sold very successfully providing handsome profits for Gurgel, before the 1990 introduction of the firstly imported, then home assembled, Russian LADA Niva 4x4; so ending Carajas production on at the end of 1990.
Established in 1996 the first vehicle produced was the T4, a near copy of a contemporary Jeep Wrangler (the evolution of the iconic CJ). It was primarily designed for military use to replace the authentic but expensive (given the weakness of the Real) Jeep products then in use.
The growing strength of the Brazilian economy also meant that potential for private sales in the 4x4 leisure sectors could be achieved, and proven to be the case. That success prompted ongoing evolutionary redesigns to better befit its sub-brand aspiration as a true segment contender both at home and critically abroad.
To promote the Troller name in other Emerging nations the vehicle has competed in the tortuous Daker Rallye so as to become recognised as a proven product in Africa, with the building of a transplant factory in Angola in 2005.
Given the domestic success and foreign market potential the company was acquired by Ford do Brasil in 2007
[NB the Pantatal mid-sized pick-up truck was launched in 2006, but proved structurally defective and so was recalled by Ford for optional buy-back via refund; this no doubt also bouying the goodwill of Ford do Brasil and creating a migration effect into its own (BT-50) Ranger pick-up, itself made in Colombia].
[Of note is the fact that during the mid 2000s Ford had simultaneously been promoted the idea of an African self-designed and self-built utility vehicle using a mix of tubular space frame, steel sheet and MDF external panels (effectively a better robust and capable evolution of the early 1980s 'Africar'). This experimental vehicle undoubted paved the way for Ford-Troller Angola].
Since the earliest days of the motorcar Brazil's leaders nurtured the aspiration of creating Brazil's own vehicles. It would take twenty-five years to create the first step with domestic final assembly of American trucks and cars, and fifty years to see the home-manufacture of fully built-up European vehicles.
The growth of the national auto-sector and thus impetus to national economic expansion was thanks to the ISI (import substitution) policy drives of Presidents Vargas and Kubitschek, which balanced the overall effects of incoming FDI. The economic circularity effect was enormous and allowed a new raft of Brazilain merchants (as intermediary distributors and agents) such as Joao Gurgel and Paulo Aguiar (of Dacon) to become household names.
Those merchants then in turn sought to style themselves as new industrialists, their commercial buoyancy dependent upon their acumen of what were inevitably 'hit or miss' opportunities. Typically the certainty of defence related government contracts (as with Gurgel) versus over ambitious, ill-considered, over-simplified and thus misdirected projects misreading the overtly conservative private consumer (as with the Dacon 828).
Critically, the Gurgel case study provides much to be absorbed, perhaps most importantly just how an entrepreneurial vision (such as the BR-800) can be undermined by mixing business financing and retailing basis. These two worlds ordinarily far apart, and when combined of great concern to prospective customers and external others.
As previous importer of the VW Fusca/Beetle (the legendary 'people's car') the founder Joao Gurgel had the ambition of recreating that vision in the Brazilian mould. He believed that a notional national interest and popularity for mainstream expansion of his all-Brazilian owned company could be relied upon to recapitalise the firm. (This belief of supportive people-power possibly stemming from the financing origins of the original KDF-Wagen).
Thus when the BR-800 was launched it was priced well under all other locally made but foreign owned products at US$5000. However, purchase of the car also required buying into the business at a further cost of US$5,000 for 750 shares. Thus the car would actually cost US$10,000 for what was technically an inferior product and the owner would gain a small stake-hold in the firm and the Brazil-Car vision.
But Brazilian's either recognised the risk (in both the business model and the possibly of Gurgel's sharp exit) or quite simply could not afford the overall amount. And critically believed that if it was such a good investment that Brazil's own clique of Financiers and Industrialists would have kept it to themselves, used normal bank debt, privately held shares or a sensible mix. Moreover those with insight wondered where the sizeable profits from the Carajas project had gone given the low level of BR-800 research and development. It was all rather peculiar!.
That said, from 1966 through to the early 1990s much learning was indeed gained.
Pragmatic innovation created from necessity engineering in both products and manufacturing process: from 'Plasteel' to the 'Karousel'. And vitally, commercial appreciation of home and foreign markets, risk adversity and the need for robust business thinking as opposed to overt untethered optimism became much more engrained.
Pragmatic innovation created from necessity engineering in both products and manufacturing process: from 'Plasteel' to the 'Karousel'. And vitally, commercial appreciation of home and foreign markets, risk adversity and the need for robust business thinking as opposed to overt untethered optimism became much more engrained.
Unfortunately however Brazilian capabilities would continue to lag behind the accrued learning of foreign firms who were typically decades ahead in terms of technical advancement, commercial insight and access to cheaper wholesale funding.
Nonetheless, Brazil's entrepreneurs continued to drive onward over such obstacles, best seen with the original (though very derivative) Troller T4. Thus demonstrating that they had learned from the product and commercial mistakes of their predecessors and recognised that for a Brazilian enterprise to succeed it must 'plug-into' not only the national need but the broader global auto-sector picture.
Indeed that broader big-picture is what massively enabled the learning of the Brazilian workforce, from senior managers to apprentices, when VW and FIAT long ago, and later joined by Renault et al, sought to make Brazil the focal point of global architecture engineering and manufacturing processes.
Thus we see that a confluence has arisen between the global ambitions of the big foreign players (that feeds directly into Brazilian development) and the commercial and technical learning of local entrepreneurs.
Themselves not just reactive to prospective government tenders nor supposed home-market consumer niches, nor indeed beguiled the yesteryear sole ambition of USA export, but now recognised the need to identify EM opportunities on a worldwide basis and the ability to indeed lead, partner or indeed merge with major global automotive firms to realise those ambitions.