Alcoholic cars popular in Brazil

Press, 25 September 1980, Page 16

Alcoholic cars popular in Brazil

Reprinted from the “Economist” London

"Buy cars that sip alcohol, not petrol” was the sales pitch made by Mr Wolfgang'Sauer, president of Volkswagen do Brasil, on a recent swing around Far Eastern countries. In Brazil, where . VWs are made, customers are now gungho for alcoholpowered models. It will be conveniently profitable for the company if customers in the Far East, where some VWs. exported from Brazil are assembled, follow their lead. At first Brazilians were reluctant to buy alcoholpowered cars or to pay the $360 it-costs to have engines converted. They fretted that the new fuel might cause corrosion. ' A 400 per cent increase in the price of petrol in Brazil in just over a year, while the price of. alcohol has stayed steady, has persuaded Brazilians to change their minds. So sharply has the fashion changed that in the two months demand has boomed for. cars • that run on pure alcohol rather than the 20- per cent alco-'hbl-petrol mix that is sold in all forecourts. Brazilian carmakers were scornful of the alcohol programme until a

couple of years ago, but ■ are now convinced that the new fuel is here to stay. They are probably going to keep their promise that at least a quarter of the 800,000 cars they produce this year _ will have pure alcohol engines. Next year alcohol-pow-ered cars might be well over half of production. Volkswagen says 80 per cent of its 1981 cars will have alcohol engines; . Ford says 60 per cent. VW has already exported a few alcdhol-engined cars, some to the Philippines and Indonesia (where VWs made in Brazil are assembled). Fiat has sold some around Latin America. These two companies were faster off the mark than the Ameri-can-owned General' Motors and Ford. There are still huge problems. So far, even in Brazil, only 1200 pumps sell alcohol,' half of these on forecourts served by the company, Petrobras. The oil giants are now hurrying to catch up. This year, considerably more alcohol is being distilled than can be used. It is probable that alcohol worth $2OO million is being exported, mainly to the United States and Japan. - This year’s 4 billion-plus

litres of alcohol would, be enough to fuel 1.5 million cars. But there was a four-month period last year when sugar cane was not harvested, and enough had to be stockpiled to tide over.

So far, there has been little conflict over land use between the powerful sugar-cane growers and the food producers. But a clash is imminent. Sugar cane, for all uses, is now grown on 2.6 million hectares.

To meet the 10.5 billion litre target for 1985, an extra 2M ha will be' needed — more than that if Brazile tries to produce a lot of alcohol for export as well, to help pay the oil import bill.

One of the most economic ways of getting alcohol might be for the rural poor to distil it almost in their backyards, making the stuff from cassava (of which more than 25 million tonnes a year is grown, mainly on poor and arid soil). If sold locally,, that, would keep both production, and distribution costs to a minimum — provided that too much of some sorts of subsidised alcohol did not then go down the throats of poor peasants rather than of rich men’s motoj cars.