Ford of Brazil Tapping into World’s Leading Ethanol Market
Brazil is a world leader in the adoption of an ethanol fuel economy — more than 75 percent of all new vehicles sold in Brazil are flex-fuel — and Ford of Brazil is tapping into the market with plans to grow its offering of flex-fuel vehicles.
After nearly three decades of work, Brazil has succeeded in developing an independent energy economy based in part on its abundance of sugar-cane — an efficient crop used in making ethanol. Today, up to 20 percent of Brazil’s transport fuel market is ethanol, compared with about 1 percent world-wide. In fact, Brazil’s ethanol export is likely to double to $1.3 billion in 2010 from $600 million in 2005, according to reports.
Flex-fuel vehicles have played a crucial role in Brazil’s ethanol economy. Brazil offers 100 percent ethanol at its gas stations, as well as "regular" gas, which is E25 (25 percent ethanol and 75 percent gasoline).
"The thing that is amazing is that three years ago there were no flex-fuel vehicles," said Barry Engle, president, Ford of Brazil. "Between then and now flex fuel sales went from zero to 75 percent of the market."
Ford of Brazil was the first to show a flex-fuel concept vehicle to Brazilian consumers.
"When we launched the Ford Fiesta in 2002, we showed a flex version of it," said Engle. "We were the first manufacturer to show a concept vehicle with flex-fuel and it was a huge hit."
Ford of Brazil produced its first flex-fuel vehicle in 2004 and today offers three high-volume vehicles that run on ethanol: the Ford Fiesta sedan, Fiesta hatchback, and the Ford EcoSport — the only flex-fuel SUV in Brazil — all available with the flex-fuel 1.6-liter RoCam engine.
"The Fiesta and the EcoSport combined represent two-thirds of our sales volume," said Engle.
Almost half of all the Ford light vehicles sold in Brazil are flex-fuel. Ford has a 11.5 market share overall, with Fiat, VW and GM being major competitors.
Ford is expecting to boost sales of flex-fuel vehicles, however, with the introduction in two months of a 1 liter flex-fuel engine to the Fiesta line. The 1-liter engine is the most popular in Brazil.
"With the expansion of the 1-liter flex-fuel engine, 100 percent of the Fiesta volume — our highest volume vehicle — will now be flex-fuel," said Engle. "Our strategy is that in any given segment where there is consumer interest in flex-fuel, we want to be there."
Brazil is also looking at developing bio-diesel, which is a blend of ethanol and diesel fuel. Ford is also hoping to capitalize on its leading lineup of diesel engine vehicles, which includes all F-Series trucks and most Ford Rangers.
"There is work under way to also apply flex technology to diesel engines," said Engle. "There is a lot of activity going into developing bio-diesel, as well as vehicle technology to allow diesel engines to run on this fuel."
And Ford of Brazil is aggressively marketing its flex-fuel vehicles. In Ford’s latest TV ad, an indecisive boy can’t decide between a pair of brown and red shoes. As a teenager, he can’t pick between a blonde and a brunette at a party. The ad ends with the young man pulling up to a gas station in his Ford Ecosport. The attendant asks: "Alcohol or gasoline?" The man, happy he doesn’t have to choose, raises two fingers, signifying both.
"Flex-fuel is really top-of-mind with consumers right now and it’s captured their imaginations," said Engle. "As proof of that, one of the largest newspapers in the country did a poll of readers asking them to vote on the most popular ad of the year, and the EcoSport ad was recognized as the winner."