GM and Ford,
take note: flex-fuel cars outsold conventional gasoline driven cars in Brazil in 2005.
Sales of flex-fuel
cars, which run on any mixture of ethanol and gasoline, amounted to 53.6 percent of the Brazilian market in 2005, up from 17 percent in 2004.
Flex-fuel cars took off in
2003, when the Brazilian government instituted a 14 percent sales tax for cars capable of burning ethanol, instead of
the 16 percent levied on gasoline-only vehicles. Ethanol-only cars were briefly popular in the late ’80s in Brazil,
driven by a combination of high oil prices and heavy government subsidies for domestically-produced ethanol. When
oil prices fell, and sugar prices rose, the government could no longer afford to prop up the ethanol fuel market, and
the ethanol-only cars virtually disappeared.
Unlike the corn- and soybean-derived ethanol used in the U.S.,
Brazil’s ethanol is derived from sugar cane, and now supplies both domestic and export markets. Also unlike the U.S.,
Brazil is 91-percent self-sufficient in oil, and the country should reach total self-sufficiency when a huge offshore
oil field discovery announced today goes on-line in 2011.