A recent study has revealed that the number of millionaires in Brazil is set to rise by almost 40 per cent over the next four years. The impact of this increased wealth is already reaching the luxury market in Brazil with increased sales of high-end cars, yachts, tourist packages and property.
The study carried out by Credit Suisse found that Brazilian millionaires, who currently number around 168,000, will increase by 37 per cent over the next four years. This marked rise in the number of high-net-wealth individuals will boost the luxury market in Brazil, a sector that has maintained it buoyancy despite the country’s recent financial difficulties.
Travel and tourism in the luxury market in Brazil
The travel and tourism industry ranks as a major sector for the luxury market in Brazil and it’s also a growing one. “Our market is a growing curve,” said Guilherme Padilha, President of the Brazilian Luxury Travel Association, at the sixth edition of the International Luxury Travel Market held recently in Sao Paulo.
Padilha highlighted the fact that a more competitive currency has led to an increase in high-end foreign tourists but it has also “encouraged domestic tourism”. As regards trends within the luxury tourism market in Brazil, he pinpointed the rise in popularity of small resorts promoting “unique experiences”.
The boom in high-end tourism can also be seen in figures provided by AM Resorts who expect to double their visitor figures this year in Brazil. For their part, Leading Hotels of the World report that Brazilians make up 52 per cent of all guests in Latin America. The company foresees an increase in this figure by 2017 after the opening of two more luxury hotels in Brazil including the 5-star Tangara Palace in Sao Paulo.
The luxury market in Brazil for cars
Brazil counts as one of the world’s major markets for luxurious cars with several of the most important high-end makes setting up manufacturing plants in the country. This is the case of Jaguar Land Rover – the facility that opened in Brazil in June is the first fully-owned ever outside the UK.
Jaguar Land Rover joined the VW Group and General Motors, also new comers to the luxury market in Brazil, and Mercedes-Benz who expanded operations in March. Another luxury car brand, Audi, expanded its facilities in Brazil in October last year.
BMW has just completed two years of manufacturing in Brazil producing 24,000 units. The BMW plant, located in Araquari in Santa Catalina state, ranks among one of the most modern in the world and attracted R$930 million in investment. The plant makes six high-end models for the luxury market in Brazil and abroad.
The luxury market in Brazil for exclusive yachts
Buyers and exhibitors at the recent Sao Paulo Boat Show saw for themselves the health of the luxury market in Brazil. Around 41,000 visitors attended the show where 100 businesses showcased luxury boats and accessories.
The Boat Show is the largest in Latin America and the Brazilian market, one of the biggest in the world. With over 8,500km of navigable coastline and 45,000km of rivers and lakes, Brazil represents huge potential for luxury boat manufacturers.
Among the stars of the show was an Armani-designed powerboat priced at US$4.5 million. The boat, designed exclusively for the luxury market sector in Brazil, is built by Azimut Yachts with all design by Italian icon Armani.
Luxury property market in Brazil
Luxury property too is enjoying a boom in Brazil with specific areas attracting strong investor attention. This is the case of Ceará in Northeast Brazil where demand for properties priced at over R$1 million has soared. In Fortaleza, searches for the type of high-end home went up by 92 per cent last year.
“The luxury market in Brazil is clearly booming,” says Dies Poppeliers, Managing Director of BRIC Group. “The marked increase in the number of millionaires will undoubtedly boost demand for all types of luxury goods from cars to property, particularly homes located in unique destinations.”
An investment company specialising in global real estate opportunities, BRIC Group is currently developing The Coral resort, in Northeast Brazil, a luxury beachfront resort. BRIC Group also offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Sources: O Globo, Luxury Lab, International Luxury Travel Market)