Why Brazil's cars are such big killers

The booming country is pumping out autos -- many with US and European names -- that lag in safety features common elsewhere.

By Bruce Kennedy May 14, 2013 7:11AM

A welder moves cars parts at the General Motors Co. Sao Caetano do Sul manufacturing facility in Sao Caetano, Brazil on Oct. 24, 2012 (© Dado Galdieri/Bloomberg via Getty Images)Critics have warned that globalization comes with a price. And it's not just low-wage workers in far-off places like Bangladesh who often pay that price in human lives. It also appears that auto buyers in South America's largest economy are paying a deadly toll.


Brazil is one of the BRICs, an acronym for Brazil, Russia, India and China, the international economies that have been booming in recent years while bringing hundreds of millions of their citizens out of poverty.


But The Associated Press released a startling report over the weekend outlining how auto manufacturers in Brazil, including European companies and U.S. makers such as Ford (F) and General Motors (GM) -- at facilities like GM's Sao Caetano plant (pictured) -- are producing vehicles that are apparently unsafe at any speed.


As AP notes, Brazil's economic engine has helped bring 40 million people there into the middle class over the past decade. And one of the first big purchases those newly minted middle-class Brazilians make is a car.


But more than 9,000 people died in car crashes in Brazil in 2010, compared with 12,435 in the U.S., which has an automobile fleet five times the size of Brazil's.


The problem, AP says, is that locally made cars are "produced with weaker welds, scant safety features and inferior materials compared (with those of) similar models manufactured for U.S. and European consumers, say experts and engineers inside the industry. Four of Brazil's five bestselling cars failed their independent crash tests."


The problem is apparently twofold. Driving conditions across a lot of Brazil remain dangerous. And then there are the cost-cutting efforts by local auto manufacturers that are trying to churn out cars rapidly for Brazilian consumers.


"The electricity used in building a car is about 20% of the cost of the structure," Marcilio Alves, an engineering professor at Brazil's University of Sao Paulo told AP.


"If you save on electricity, you save on cost," he added. "One way to save electricity is either (by) reducing the number of spot welds or using less energy for each spot weld made. This affects structural performance in the event of a crash."


AP also quotes the industry consulting firm IHS Automotive, which notes that Brazilian manufacturers earn a 10% profit on locally made cars, compared with 3% on cars made in the U.S. and a global average of 5%.


While stronger safety measures have dramatically reduced U.S. auto deaths over the decades, Brazil appears to be heading in the opposite direction.


"Entry-level cars in Brazil are incredibly dangerous, it can't be denied," Maria Ines Dolci, with the consumer defense group Proteste, said during an interview with the wire service. "The manufacturers do this because the cars are a little cheaper to make and the demands of the Brazilian consumers are less. Their knowledge of safety issues is lower than in Europe or the U.S."


European and American auto companies responded in a variety of ways to the AP report.


The news service said GM "had no comment other than to say that its cars in Brazil are legal." And in an emailed statement, Italy's Fiat (FIATY), which owns a controlling share of Chrysler, said its Brazilian-made vehicles have more body reinforcement to strengthen them against Brazil's "harsher roads and terrain."


AP also quotes an engineer for a major American automaker, who spoke on condition of anonymity, saying his company failed to implement many advanced safety features in Brazil because the law there doesn't require them.


"The automakers are pleased to make more profitable cars for countries where the demands, whatever they may be, are less rigorous," he said. "It happens everywhere -- India, China and Russia, for example."


More on moneyNOW

22Comments
May 14, 2013 9:28AM
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"AP also quotes an engineer for a major American automaker, who spoke on condition of anonymity, saying his company failed to implement many advanced safety features in Brazil because the law there doesn't require them."

 

And you wonder why we need regulations.

May 14, 2013 11:23AM
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Hey, independent voter and Phil.

Do you remember the 60's, 70's, 80's in America?  Cars did not have air bags, no ABS, and hardly any crash tests.  As vehicular death rates reduced, the scientific community couldn't decide if it was because of improved tires [radial vs. bias ply], brake systems [disc vs. drum] or improved road construction techniques, guardrails, sign post, and bridge abutment design....it's not just about the welds.  How about safe driving schools and speed limits?

May 14, 2013 3:55PM
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1. ABS is not mandated by law in the U.S. (it is in the EU, since '07)... My '08 Nissan Versa has no ABS or traction control, and still has drum brakes in back... just an fyi.  It's also the most reliable and trouble free car I've ever owned.

  Shoddy welds are much more dangerous than cars without seatbelts.  A garbage weld could cause the weld to crack from the impact of a pothole, leading to a full collapse of say.... a front subframe.... for those that don't know... that's bad, very bad, and could come with no warning.  

At least with no seatbelt you knew that if you hit something chances were it was going to hurt.  Garbage welds are hidden, out of sight, and no one expects it... that's the problem.  




May 14, 2013 11:35AM
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The buyers of the cars are adults or get their money from adults. I am not so high and mighty as to tell other adults how to spend their money.  Adults can choose to spend more for a safer car or choose to spend less for a less safe car. I've driven Volvo's as far back as the 60's even though it was a really more than I could afford for safety reasons. I gave up something I needed less to get something I needed more. That's what thinking people do.  The car buyers of Brazil know about the safety issues and it's none of your or my business as to where another adult chooses to spend money.
May 14, 2013 5:59PM
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Automakers make cars that conform to the laws in the countries where they are sold.  Don't blame manufacturers, blame legislation.  
May 14, 2013 12:43PM
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The Big Three American car manufacturers fought virtually every safety measure mandated by law with everything they had.  They resisted seat belts, then they resisted adding shoulder straps.  They fought long and hard against air bags.  I think all the lawyers and ad guys who used to work for the tobacco companies found employment working for the American car manufacturers fighting safety regulations with outrageous claims of how unsafe seat belts (if your car runs into a lake you'll likely drown) would be and how dangerous air bags would be (they'll bust your nose and knock your eyeglasses off).

 

They didn't add ABS braking systems to their cheaper cars until the very last minute, when mandated by law.  Then they advertised it as if it was some big deal on their part.  Some of the European manufacturers -- BMW and Volvo to name just two safety leaders -- were out front, adding safety features long before they were required.  BMW had ABS brakes as standard equipment on every car they made since 1967.

 

For decades Detroit made what they considerd the best value for the dollar -- meaning they cut corners every place they could to produce crappy cars with plastic side anti-ding strips that were attached with two-way adhesive that came undone within a few years and plastic bumper coverings that turned a different shade from the rest of the car in no time at all.  For years they tried to tell us their humongous cast iron engine blocks were superior to European aluminum blocks.  What they put out in the 1960's and '70's was pure crap.  Then they wondered why people would be willing to pay so much more for quality imports.  They were still producing land barges that got horrible gas mileage until the Arab oil embargo of 1973.  The 1967 oil embargo didn't hurt much at all because Saudi Arabia still sent us oil and because we weren't as dependent on imports back then.  But following the 1973-'74 oil embargo, the American car industry suddenly saw the light.  Americans demanded better gas mileage.

 

It's a shame that Brazil has to learn the hard way.  Unless they demand better quality and better safety, they won't get it.

May 14, 2013 12:23PM
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ahhh...reminds me of the good old days in the US

 

regulations...who needs em?

 

 

 

 

 

 

Aug 22, 2013 8:56AM
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@Golfpal: it´s not like that. If the UNSAFE cheapest cars, with 1.0 liter engines, no power steering not even electric windows would cost $15k in the US, what do you think would happen? What if your Volvo cost $80 thousand dollars or more?
Aug 22, 2013 8:53AM
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It is NOT like if the brazilian government does not require advanced safety measures. It´s that the car companies  threaten the government, saying they can´t reduce profits and that implementing the advanced safety measures would make the costs prohibitive to consumers (check other articles about car prices in Brazil... a Jeep Grande Cherokee basic model costs $80k)
May 14, 2013 4:28PM
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So GM... killing people with your cheap Cars is ok in others Countries...Last time I checked... Human Life worth just as much there as here....Screw you  (GM) and the Horse you rode in on..
May 14, 2013 10:31AM
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There'd still be rat turds in the meat if not for regulation and oversight. The most profitable business will always be an intentional killer.
May 14, 2013 11:11AM
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Proof again that Big Business will do anything and everything to increase profits, no matter who else pays the price for the consequences, even their own customers.

Ah, "free" market capitalism, ain't it great?

May 14, 2013 12:06PM
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Hey FloridaDave,

 

Remember "Unsafe At Any Speed"?

 

But I digress.

 

And your screed goes hilariously astray, what with its fallacious "either/or" implication (it's EITHER the cars OR it's other things such as guard rails and signs).

 

There's not much profit to be made in redesigned signs and guardrails, but there's a honeywagon load to be made in unsafe automobiles and inferior welds--especially when and if everyone's doing it.

 

"It's The Welds, Stupid."

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