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UK targets Brazilian market for automotive sector growth
Business Secretary confirms the opening of a new Vehicle Certification Agency (VCA) office in Sao Paulo
British businesses in the automotive sector were given a boost today when the Business Secretary confirmed the opening of a new Vehicle Certification Agency (VCA) office in Sao Paulo. The VCA office will allow manufacturers in the auto sector to export more easily to emerging markets in South America.
Automotive exports from the UK are at an all time high, with 5 out of every 6 cars produced in the UK being exported. Brazil has been identified as an important growth market for the sector.
The government is determined to build on the success of the automotive sector and is aiming to publish its automotive strategy in the summer. Ahead of this, the government has taken the decision to open a Vehicle Certification Agency (VCA) office in Sao Paulo, the first to be opened in Latin America. VCA offices support the automotive industry by verifying that cars and parts imported into local markets from the UK and elsewhere, comply with EU Directives and Regulations, as well as UN environmental and safety standards. The VCA office in Brazil will also allow manufacturers based locally to export from Brazil to the wider region, opening up new markets and further benefiting the UK economy.
Business Secretary Vince Cable said:
I want to make it as easy as possible for the automotive manufacturers to export to emerging markets.
UK manufacturers are planning to more than double their sales in Brazil in the coming years. By opening a VCA office in Sao Paulo we can make sure exports are not being held up unnecessarily.
Mike Baunton, Interim Chief Executive of the Society of Motor Manufacturers and Traders said:
We are delighted the UK government is taking steps directly to support the export of UK built vehicles, particularly with Brazil being one of the growing global markets. Almost 15% of UK automotive exports go to the Americas but we expect exports to the region to grow as recently launched premium brands and advanced technology vehicles are increasingly sought by Brazilian motorists.
The VCA is already providing safety certification services for automotive components, working with the Brazilian Transport Ministry. It is also in discussions with the Brazilian Environmental Ministry to explore how it can provide additional services, such as providing certification on environmental standards and emissions.
Eleven of the world’s global vehicle manufacturers are based in Britain and 74% of all cars and commercial vehicles manufactured in Britain are exported. Britain is also a world leader for engine production with 2.5 million units produced in 2012 by companies including Ford, Toyota, BMW, Honda, Nissan, Perkins and JCB. 62% of UK engine production was exported in 2012.
The VCA office in Sao Paulo will also open up wider markets for UK manufacturers as countries such as Argentina and Chile base their environmental and safety regulations heavily on the Brazilian legislation.