Brazil's Alcohol Cars Hit 2 Million Mark
Friday 18 August 2006
Brazil's new generation of cars and trucks adapted to run on alcohol has just hit the two-million mark, motor industry figures show.
"Flex-fuel" vehicles, which run on any combination of ethanol and petrol, now make up 77% of the Brazilian market.
Brazil has pioneered the use of ethanol derived from sugar-cane as motor fuel.
Ethanol-driven cars have been on sale there for 25 years, but they have been enjoying a revival since flex-fuel models first appeared in March 2003.
Just 48,200 flex-fuel cars were sold in Brazil in 2003, but the total had reached 1.2 million by the end of last year and had since topped two million, the Brazilian motor manufacturers' association Anfavea said.
Return of Ethanol
Brazil began its Pro-Alcohol programme more than 20 years ago to promote the use of ethanol as an alternative fuel for cars.
At the time, Brazil had a military government, which wanted to reduce the country's dependence on imported Middle Eastern petroleum after the 1970s oil shocks.
The idea fell out of favour in the 1990s after sugar prices rose and the price of oil fell, while Brazil's state oil company Petrobras discovered new offshore oilfields which reduced the need for imports.
But in 2003, a new generation of cars capable of running on alcohol entered production, thanks to a combination of new technology and tax breaks.
"Flex-fuel" cars attract a purchase tax of 14%, while buyers of their exclusively petrol-powered counterparts are charged 16%.