Unemployment Approaches 12% in Brazil

According to the Institute of Geography and Statistics, the unemployment in Brazil in the quarter ending in July reached 11.6%. Based on IBGE numbers, the number of unemployed in the South American nation rose 37.4% compared to the same time period in 2015.

Another Brazilian files for unemployment benefits

The current rate of unemployment is the highest since 2012. In the first quarter of 2016 the unemployment rate was 11.2%, an increase of 3.8%.

In total, IBGE estimates that there are 11.8 million unemployed Brazilians. Of the 90.8 million workers that are employed, 34.3 million have signed workbooks. A signed workbook is used by the government to guarantee worker rights and benefits including, unemployment benefits.

With the increase in unemployment, the average worker's salary has also fallen. Currently, the average worker is making R$1,985 per month. Employers cannot legally lower employee salaries meaning new employees are being hired at lower rates. In relationship with the same time period in 2015, salaries dropped 3%. Average salaries remained stable compared to the previous quarter.

The number of people deciding to be self-employed, estimated at 22.6 million, rose 2.4% compared to 2015 and 1.5% compared to the first quarter.

Among the areas in which employers cut the most jobs, general industry fell 10.6%, and information technology, communication and financial activities, real estate, professionals and administrators dropped 9.8%. 

Source: Globo (in Portuguese) Unemployment Continues to Rise in Brazil

Ambev Releases Cold Beer Delivery Service

Latin America's largest brewer, Ambev, has recently announced it will provide delivery service for cold beer in Brazil.

The unique delivery service will first be available in the greater Sao Paulo area, Sao Paulo proper and Ribeirao Preto before being expanded into other regions and cities across the country.

The idea of cold beer delivery was born at Ze Delivery, an in-house delivery provider of Ambev. Ze Delivery offers Ambev's most recognizable brands and specialty beers and imported beers.

Customers can also request other alcoholic drinks as well as non-alcoholic drinks, such as soft drinks and energy drinks. Depending on the region in question, Ze Delivery will deliver even barbecue staples like meats, ice and charcoal.

Products can be delivered within an hour and come cold or frozen. To request a delivery customers must access the company's website, type in their zip code and choose their products. Payments can be made with credit or debit cards or cash, and the service is available through the late night.

Source: Supermercado Moderno (in Portuguese) Ambev Starts Cold Beer Deliveries

French Automotive Company Expands in Brazil

French automotive manufactuer, Renault, recently announced it will be producing two new models in Brazil. The news is welcomed in South America's largest economy as the country goes through its worse economic crisis since the 1930s.

Specifically, Renault will begin producing Captur, a sports utility vehicle, and compact car, Kwid. Production will take place in the country's Southern region in the capital of the state of Parana, Curitiba. The news was announced last Thursday by Renault-Nissan Alliance CEO, Carlos Ghosn.

In front of reporters in the city that will produce the new models, Ghosn said that he "sees the Brazilian market stabilizing after steep sales reductions amid the country's worst recession in decades."

According to association and manufacturer data, Renault ranked sixth among automotive manufacturers in 2015 having sold 180,532 vehicles, a -23.7% drop from the previous year. In Brazil in 2015, Fiat, Chevrolet, Volkswagen, Ford and Hyundai led manufactuers. Renault held the same position in 2014 when it sold 236,721 vehicles.

Among the top ten models sold in 2015, the compact car, Renault Sandero, held the eighth position with 77,838 vehicles sold, a decrease of -22.5% from the year before. Despite the decrease, the model moved up a spot from 2014 when 95,385 Sanderos were sold across Brazil.

Captur and Kwid models are expected to be with Brazilian car dealerships by 2017. Renault is betting on these models to help it increase its market share of 6.7% in the country. More specifically, the Brazilian-born Ghosn said he is targeting 8 percent share with long term goals of 10 percent.

Regarding the Brazilian auto market, Ghosn said:

"Right now we see Brazil's auto market recovery with great hope. I don't think anybody believes the Brazilian market will stay around 2 million vehicles (of annual sales)."

As recently as 2009, Renault had less than 4% of the market. After adding to its capacity and releasing popular new models, the company's share grew. In particular, the company's SUV, Duster, was able to take on other popular SUV models, such as the Ford EcoSport.

Overall, auto sales in the South American giant have been cut in half since peaking in 2012. The main culprit is a gripping economic crisis that has led to high inflation, low consumer confidence and high unemployment. Furthermore, governmental and industrial policies have hurt the industry. The final cost of a car in Brazil may be composed of up to 50% in taxes.

Auto manufacturers are hoping the market has stabilized and growth is in store in the near future.

According to Ghosn Brazil has the potential to sell 3.5 million to 4 million cars a year.

See similar articles:

Most Popular Automotive Companies and Models First Half 2016
Fiat Leads Car Manufacturers in 2015

Read more at Business Insider Renault to Produce Two New Models in Brazil

Gol Airlines Makes Changes

Gol Airlines, the second largest Brazilian airline, has decided to swap their Chief Financial Officer and board members as the company restructures.

Gol's restructuring is taking place during an economic upheaval in the South American nation. Gol is the second largest airline behind TAM. Earlier this year TAM finalized its partnership with Chilean airlines, LAN, to create LATAM. Read more about the merger TAM Merger Best for Consumers

The Brazilian airline has decided to hand over the reigns to the chief financial officer who took the company public. The company also named two new board members as the company needs to restructure its debt as the economic crisis wrecks the country's travel industry. Gol is hoping these changes will attract bondholders' cooperation.

Gol Linhas Aereas Inteligentes SA began in 2001 and began offering international flights by the end of 2005. By 2014, the company owned 32% of the market share in the country. In 2016, the company staved off bankruptcy selling nearly half of their shares to American airline, Delta.

It was in 2003 that Gol's former and newly appointed CFO, Richard Lark, took the company public on the country's stock exchange, Bovespa. Lark held the position from 2003 to 2008. Lark's nomination to his former post was made public via a securities filing made last Thursday. Lark's seat will be filled by Andre Janszky who is the managing partner of the law firm, Milbank, Tweed, Hadley & McCloy's Sao Paulo office.

Current CFO, Edmar Prado Lopes Neto will continue with the company and "will take on new challenges within the group after the transition is completed," according to the securities filing. It was Neto who earlier this month noted that an unpopular bond swap was no enough to resolve the company's debt burden. The debt burden has resulted in four years of heavy losses and puts the company in a difficult situation as the country's economy continues downward.

Ana Luiza Constantino, who is a member of the company's controlling family, will take the board seat of Henrique Constantino. Henrique was arrested in July in the Lavo Jato corruption investigation, which has confiscated a large amount of funds and has arrested many politicians and businessmen. The investigation has also contributed to the suspension of Brazilian president, Dilma Rouseff.

Read more from Reuters Gol Substitutes Management

Check out these related links.

Foreign Ownership of Air Companies On Hold
Top American Airlines to Get Breathing Room