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Why is the Honda HR-V so popular in Brazil?

24 August 2015 IHS Markit Automotive Expert

All the headlines about the Brazilian market have been about how bad the current market situation is, with sales down 20.5% YTD and production down 15.7%. But undoubtedly there are success stories, like the one of the Honda HR-V. Its very first registrations took place in February, and since then more than 22,000 units have been registered.

That number is not higher because Honda is facing capacity issues in Brazil. Almost 25,000 HR-Vs were built between February and July, but Honda needs to balance its 120,000-unit capacity among the HR-V, the Civic, the City and the Fit. According to Honda officials, the wait for the HR-V can reach 100 days. Not even some imports from Argentina are helping, and the “problem” should be solved only next year, when Honda opens its second plant in Brazil.

This weekend, I got the chance to drive the HR-V, which led me to some conclusions of why the crossover has been so popular:

  1. It is the new kid on the block: Brazilian consumers have proved that they want novelties. When Hyundai launched the HB20, it soon stole sales from the market leaders Volkswagen Gol, Volkswagen Fox, Fiat Palio and Fiat Punto. Now people are moving toward the HR-V (and to a lesser degree, to the Jeep Renegade). The Ford EcoSport – which was the vehicle that created the B-segment crossover niche and was alone by almost a decade – has seen its production numbers plunge 46% between January and July from a year earlier.

  2. It has a pleasant design: When Renault launched the Duster in 2011, the EcoSport was not deeply impacted. Many officials from Ford and Renault pointed that both vehicles had different proposals, with the Duster showing it was a robust vehicle through its design. In that sense, the HR-V is the rock in the EcoSport’s path (as the Renegade enters the Duster’s area). The HR-V has a more subdued design than the Fit, which is a little awkward to some.

  3. It brings the features consumers are looking for: Except for June, the most expensive trim level has accounted for more than half of the HR-V’s sales. It costs BRL 90,700 (approximately USD 26,000) and offers CVT transmission, Bluetooth, 7” touchscreen with GPS, leather seats, among other features. The top trim level of Peugeot 2008, which had its initial registrations in January, offers only a manual transmission. The HR-V comes in three different trim levels, has just one engine option and two transmission alternatives and is only FWD. The Renegade has three different transmissions, the EcoSport can be 4x2 or 4x4 and the Duster has either a 1.6- or 2.0-liter engine.

  4. It is the right size: I am 6’5 and my head kept touching the ceiling, but there was enough room in the back seat to fit a 9-year-old behind me. The HR-V’s wheelbase is 102.8 inches, just smaller than the Duster’s 105.2 inches. Jeep's Brazilian website does not even mention the Renegade’s wheelbase, but it is only 166.7 inches long – the HR-V is 169.1 inches. And the HR-V has the clever ULT system, that allows the back to be a flat surface.

This is not by any means consumer research, but rather just my impressions of the HR-V.

IHS Automotive forecasts that, in 2016, sales and production of the HR-V will be in the 55,000-60,000 range in Brazil. In other words, we expect it to provide even more competition to its primary rivals in the local market.

Augusto Amorim is senior analyst, South American light vehicle production forecast, IHS Automotive
Posted 25 August 2015


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