The past few posts were fairly negative, so here's a more positive
aspect of economics in Brazil. The BRICS - Brazil, Russia, India,
China, and South Africa - have the potential to save industry. Indeed,
China's already doing so, and India's catching up.
Here's what I
mean: the European vehicle brands - BMW, VW, Renault, and all the
supercar firms like Ferrari, Aston Martin, Koenigsegg, etc. - are all
largely luxury brands. Sure, a car made by the VW or Renault groups can
be fairly affordable for Europeans, but it's still a major purchase.
Parts are also becoming ever more expensive;
30 years ago cars could have wing mirrors that were just metal and
glass, sold for maybe $50; now they all have circuits and motors and
wires, and are a major cost to replace. Skoda used to be the butt of
jokes; now it's a high-end brand. The true value-for-money car
purchases are Japanese (the unending stream of Toyota Corollas), and the
truly cheap brands are Korean (Kia, Hyundai, etc.), Malaysian (Proton),
or from other places in Asia. Many of these cars aren't even available
in the Western world (don't recall ever seeing a Tata, Proton, or JAC
in Europe).
In terms of motorcycles, it's worse. Harley-Davidson, BMW, and Ducati are niche brands; almost everybody drives Japanese bikes.
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Royal Enfield Classic Chrome. Great classic styling, 500cc engine. Image by Royal Enfield. |
The
BRICS have the opportunity to bridge the gap between affordability and
quality, and finally take over a large segment of the market if they
play their cards right.
Royal Enfield used to be one of the great
British motorcycle
brands; it's now an Indian company, and a factory is set to open in
Brazil in 2014.
Triumph is setting up in Brazil too. I drive a
Kasinski; this is a Brazilian brand that was bought up by the Chinese
Zongshen group, and is able to serve all segments of motorcycle types:
"Factory customs"/cruisers (Mirage); naked bikes (Comet); Street racers
(Comet R series); dirtbikes (CRZ); and scooters, including electric scooters
(Win, Prima, Soft). There's another Chinese brand of motorcycles available here,
Dafra, although apparently they're crap.
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Kasinski Comet GT 650R. Great-looking sports bike at a competitive price by Brazilian standards. Image by Kasinski. |
The thing is, these are
all fairly great bikes, except apparently Dafra. Sure, even in Brazil the preference is still to
drive Japanese, as the tendency is for people to think that Yamahas and
Hondas never break down. However, Kasinskis are cheaper, seem to get
rave reviews by users (I love mine too - by far the best of the bikes
I've ridden so far), have great styling in my opinion, and are built
here, which is nice (domestic
investment and employment is a good thing). I also suspect that their
motorcycles (not scooters) are all based around only 3 engine designs,
which is great for ease of production and for getting spare parts and
service. Therefore, while Asian mass production of vehicles for export
will continue to make a flood of fairly cheap vehicles available,
Brazilian - indeed, BRICS in general - vehicles have the ability to be
competitive on the domestic markets already (import tariffs help them,
to be fair), and with a ramping up of production, could be competitive
in Western markets too. I know that if I was back in the EU and looking
for a bike, if I was sure of having access to parts and mechanics, I'd
rather have a Royal Enfield for example than a Yamaha, and the price
could well be competitive.
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Kasinski Mirage 250. Probably my next bike. Image by Kasinski. |
My point is this: industry in the
Western world largely produces expensive luxury items now, because of
high labour costs, taxes, and so
on. Cheap stuff is almost all made in China (though Indian Tata make
very cheap cars too, for example). Good value-for-money is generally
Japanese - not necessarily cheap, but generally affordable - because of
high-tech automated mass production. The rest of the BRICS have the
opportunity to fill the niche of cheap-but-good or niches like
cheap-but-great-looking-good-quality-bike (Kasinski Mirage, Kasinski
Comet 650R, everything by Royal Enfield) with investment in
modernisation of industry and infrastructure. Funnily enough, in the
case of Kasinski it's Chinese cooperation in technology and mass
production that gave them a solid boost up; BRICS helping each other
without Western involvement. With this investment - in which I do think
Brazil is ahead of India, Russia, and South Africa - and with fairly
low production and labour costs, BRICS industrial goods could fill up an
ever larger segment of Western markets, and could
even supplant established brands. It also means that industry is doing well in Brazil, India, and China at least, while the Western world continues to suffer from the economic crisis. ("Brazil: What recession?")
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Kasinski Mirage 650. A "factory custom" for the 21st century. Wouldn't look out of place in sci-fi games like Deus Ex. Image by Kasinski. |
That's aside from the domestic
BRICS effects: a virtuous cycle of production driving up living
standards, employment, and wages, which in turn promote more production;
more choice for the consumer; more affordable vehicles for BRICS
citizens; and the opportunity for Indians to take bitchin' café racers
up the Himalayas on holiday while Brazilians take badass bikes racing
down Copacabana. Certainly, for me, life is good.
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Me parked in Copacabana :-) |