The Japanese have pretty good lock on the market in Brazil, the Chinese can only compete by bringing in knocked down units and assembling them in Brazil. Then they have to manufacture or source as many parts at the highest possible percentages domestically to keep costs down. If it is more cost effective to do that then to import the cheap Chinese parts plus import taxes compared to domestically made without a tariff. Honda invested allot and they are capitalizing on their investments. However such a system left unchecked is highly inflationary. Honda s big advantage in Brazil is that the make engines there.


What makes it really interesting is the trade unions and how they act or react when threatened to be under cut. If Brazil did not have high import tariffs then those domestic factories would take a big blow. They protect and they do that through circles of inlfuence and often by lobbying government.