No Gol and Uno, the end of popular cars is near; understand

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The Brazilian automotive market has always been thirsty for models that, in the name of a lower price, were simple to build and brought only the basics of equipment.

O VW Beetle was the best selling car in Brazil from the beginning of the national industry in the late 1950s until finally pass the baton to the goal, released in 1980, in the middle of that decade. Despite having completely different conceptions, they had one element in common: they were made to be simple, reliable and cheap.

In the early 1990s, with the beginning of the popular car era, the Fiat revamped the Uno, launched here in 1984, to make it even more “basic” and take advantage of a lower IPI (Tax on Industrialized Products) tariff to be one of the cheapest cars in Brazil at the time. There were times when having 50 hp of power was rare, safety and emissions legislation almost didn’t exist and items like passenger side mirror and headrest were optional.

It was still expensive to buy a car, so people were content to have vehicles without air conditioning and limited interior space.

After the turn of the 2000s, the national industry gained volume and, with that, it was possible to dilute the cost of development — and of some extra equipment. And so the public got used to having power steering, air conditioning and other items that were considered luxury items in the past. Even automatic transmission has been more in demand.

Already in the 2010s, government regulations on safety and emission of pollutants began to impact the costs and, consequently, the prices of cars.

In 2014, for example, ABS brakes and double front airbags became mandatory. In 2023, the demand for electronic stability control will come as standard. Now in 2022, a new phase of the emissions control program, Proconve, will even require control of fuel vapors emitted during fueling.

The public’s taste has also changed. Buyers have come to want more and more SUVs. They aren’t necessarily more expensive to produce, with most derived from regular existing cars, but the public sees value in the higher height of SUVs and this type of car has become more profitable for automakers.

Security, plentiful equipment list and larger size print. All this goes against what cars such as the Volkswagen Gol, Fiat Uno and other popular models represented in the past. And that’s why they’re likely to go out of line soon.

Less volume, greater profitability

Whereas in the past, the ranking of best-selling cars was practically dominated by cheaper entry-level cars, today the scenario reflects the changing behavior of automakers and customers. Before, cars like Gol and Uno, in addition to the Chevrolet Celta and Ford Ka were at the top of the list. From 2021 to November, Fiat Strada is the leader, a pickup truck that starts at R$ 87,190 and is the only one this year to have surpassed the milestone of 100 thousand units sold.

Furthermore, the presence of more expensive pickup trucks and SUVs in the ranking is undeniable. Behind the Strada appear Fiat Argo and Hyundai HB20. Soon after, Jeep Renegade (69,621 sales in the year), Fiat Toro (65,754) and Jeep Compass (64,240) arrive. Real entry cars lagged behind, with Fiat Mobi having 63,103 licenses, followed by former leader Chevrolet Onix (62,096) and, further down, the VW Gol (57,899). Fiat Uno, for example, sold only 19,240 units this year.

In other words, while the ranking used to be concentrated on one or two popular cars with higher volumes than the others, today the scenario is of loss of share of entry-level models in favor of larger, more expensive and equipped SUVs or pickup trucks. As this is a reflection of the current market, automakers are aware of this movement as well.

It is worth remembering that 2020 and 2021 were years of extreme difficulties for the global automotive industry. These were times of closed factories and shortages of components. Knowing that the demand for cheap cars has decreased and that this type of vehicle requires high volumes to be profitable, the focus of manufacturers is shifting.

Ford is one of the global automakers that has already warned: it will focus on SUVs and pickup trucks and, in general, on vehicles with greater profitability and lower volume. But the North American brand is not alone and the scenario that takes place both abroad and in Brazil will show a change in what we will see on the streets.

Goodbye or see you later?

Without the large volumes of yesteryear, it is not feasible for automakers to invest in entry-level segments. The costs of adapting cars to new safety and environmental requirements alone would drive up prices. Not to mention the currency devaluation that made the cheapest 0 km cars in Brazil start at almost R$ 60 thousand.

Those who are going to spend larger amounts on a vehicle no longer accept being deprived of a good finish and the greatest possible amount of equipment. The reflex is that the sales of entry cars dwindle. Without investments, popular veterans grow old. Gol has been in the same generation since 2008, and Uno since 2010.

In the specific case of Volkswagen, the company’s president for South America, Pablo De Si, confirmed that the Gol will no longer be produced in Brazil in 2022.

The reason is that its old platform does not allow the installation of new security equipment and it escapes the company’s plans to concentrate investments in the MQB architecture, which today is the basis for most of the brand’s products, ranging from Polo to Tiguan Allspace with few variations. Gol only shares platform with Voyage and Saveiro today.

It remains to be seen whether the Goal will have a final farewell or a makeover. Volkswagen announced investments of BRL 7 billion, and this will include the launch of four compact models between 2022 and 2026 in Latin America. One of them should be a simplified current Polo setup to try to inherit Gol’s clients.

The doubt is that the name can still be used in the future in a subcompact SUV, similar to a Renault Kwid or the future Citroën C3. The greater height and adventurous appeal would justify the higher cost in the eyes of customers. Anyway, Goal, as we know it today, has its days numbered.

Fiat Uno must not escape this fate either. The brand has not officially declared anything and the model has some attributes that would even facilitate its survival. Its platform is shared with Mobi and Fiorino, and the current generation hatch has already offered stability control in the past.

The issue for Uno is that buyers of cheap cars migrated to Mobi, while those who want more internal space went to Fiat Argo. Its sales dropped while those of the other models of the brand grew. With the recent launch of Pulse, the automaker also started to invest in the profitable segment of SUVs.

The end of Gol and Uno in Brazil, when they occur, will end a cycle in our industry. Gone are the days when automakers invested in simple cars to be cheap, sell in high volumes and thus ensure profit. The future will be increasingly focused on vehicles with greater added value and, whether by law or customer demand, better equipped and more expensive.

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Reference: CNN Brasil

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