C is for Corruption: The Car Dealer

Nice car, if you can get it to market.

Having been in Brazil for a few years now and never having lost contact between the early 90s and now, when I was out of the country, I have several accounts of corruption cases which have not made it into the media (yet), which I will will be posting. The first one, was The Paper Company.

This one is The Car Dealer:

A large German car producer wants to expand it's market footprint. Brazilians are all over Audi, BMW, Mercedes and Porsche and all you have to do is setup a storefront - advertisment and financing is usually not necessary. Many pay in cash or charge it to Amex, they just want the damn thing.

The problem was that in the northeast a dealer wanted to do everything the correct way: Get all the documents properly, make sure the site got licensed, hire all employees correctly, etc. The guy was not German, but he actually was one of the correct Brazilian business men I so much admire as they maintain their moral standards in an... let's say "adverse" environment.

This dealer had everything together, except for the operating license which was issued by the mayor's office of the medium-sized town. And the mayor wanted to get a car for free to issue the license. The dealer refused and the license was not issued. The dealer tried all legal loopholes he could find... to no avail. He got pressured from future customers, from friends and from the big German car company that wanted to sell cars in this town, and was willing to bend rules - but he did not give in.

Eventually, the mayor must have had pity, or the mayor lost the election - but the dealer did not pay up... and got the license... a few years after he applied for it.

Growth in Europe Meets Growth in Brazil

Maybe not enough capacity in the future...

 Photograph from Hyougushi at http://flickr.com/photos/71481771@N00/397656432

Last week I met with a few fellow (German) expats for drinks in Vila Madalena and during the evening we found out that of the six people at the table, four had been on the same flight coming in from Munich two days before.

It is pretty amazing. Just about a year or so ago, Lufthansa flights from Germany were full, but not to the point of bursting. This has clearly changed. On my flight to Germany about two weeks ago, they transported two passengers on the jump seat... on the way back, same thing. In addition, at least four people were downgraded, frustrating my upgrade attempt.

Lufthansa already has daily flights from MUC and FRA to GRU and will also take on FRA to RIO this October. In addition, TAM also flies daily to FRA from GRU and RIO. I believe that this will not be enough - I have heard rumors of taking in a 747 for the MUC-GRU instead of the A340, which would offer another 70 pax seats (the A380 will never fly the route as GRU is barely equipped to receive a normal 747). I have also heard a rumor of DUS-GRU and of TAM taking on GRU-ZRH in addition to the daily Swiss flight.

If you consider the amount of German companies in Brazil and the growth both countries are going through, the Lufthansa-Exec responsible for South America clearly has a "good Problem" on his hand right now... The only frustrating thing about all of this, is that all flights will go through the GRU and GIG gateways... clearly a disaster.

Crisis, what crisis?

PS, Korean Air apparently read my post about Hyundai ;-) and is increasing the frequency of flights between Seoul, Los Angeles and São Paulo. Thanks, http://expatbrazil.wordpress.com/.