Bahia is the state that sells the most cars by consortium; understand how it works

Bahia leads the national ranking as the state that most participated in the negotiations for car sales by consortium in the domestic market. The participation potential closed the year 2021 at 55.5%.

In addition to light cars, motorcycles are also on the rise in the segment. Last year, Bahia accounted for 10.6% of negotiations for motorcycle sales, even surpassing São Paulo, which had 10.3%. The data are from the Brazilian Association of Consortium Administrators (Abac).

The reseller consultant ConsorcioCred is one of the companies that had great growth in the consortium business in the last year. From 2020 to 2021, the company had an 18% increase in the number of sales (from 142 to 172 letters) and a 30% increase in revenue (from R$1.1 million to R$1.5 million).

“We attribute this to recent increases in the basic interest rate, the Selic, which has made the consortium more competitive”points out marketing assistant Paulo Modesto.

According to him, the sales sector that grew the most in the company was precisely that of automobiles. “The other sector that always competes with this is real estate. But, in Brazil, now it has high prices, so this leverages the automobile sector”, adds Modesto.

Commercial manager of Retireuto Veículos, Eduardo Pontes works with the Chevrolet Consortium and says that 60% of the vehicles sought are new and the rest (40%), used. “People are no longer able to afford financing and start planning to opt for a consortium. Motorcycles are well sold because they are a widely used means of transport with a very affordable installment value. But cars are also very popular. sought after and even have room to grow more”, says the commercial manager.

The data point to a general growth in the consortium sector both in Bahia and in Brazil as a whole. Sales of new quotas in the state grew 8.6% from 2020 to 2021. In contemplations, the increase is even greater: 19.6%.

According to Abac, the consortium system saw its participation in the Brazilian economy double in 20 years. It jumped from 1.9% of GDP in 2002, when assets under management totaled BRL 29 billion, to 3.9% in 2021, with BRL 281 billion.

Last year, the consortium sector overall reached 8.4 million participants, the highest recorded in nearly six decades of history, representing a growth of 14.6% over the previous year. In addition, the mark of R$ 202.34 billion in commercialized credits was reached.

“The increase in demand for consortia is the quest to contract a good at a lower cost. The interest rate has been growing and to seek financing the cost is very high. Therefore, the consortium is an alternative”points out economist and financial educator Edísio Freire.

The federal public servant Perla Ferreira, 44 years old, was one of ConsorcioCred’s consortium members. She bought an apartment on the plant in 2007 and, for that, she first made a consortium with another company. “I bought the letter of credit, made some bids and got the contemplation in about 4 months”, she says. However, in 2012, when the apartment would be delivered, she decided to exchange it for a larger one. For this, she had to opt for a financing, which she did not work out.

“One day, putting everything on the tip of the pencil when doing the Income Tax, I saw that I had already paid almost R$ 200 thousand and my debt balance had decreased by R$ 20 thousand. Then I said: ‘I need to do something’. That’s when I thought about the consortium again, this time with ConsorcioCred”, he says. As now Perla didn’t want to and couldn’t wait, she bought a contemplated letter. “Even so, it was worth more than the funding. Even if I waited, it was worth it. In terms of financing, I was going to pay it off for 35 years and with huge interest rates. In the consortium, the longest quota I had was 12 years and only with credit update, without interest ”, she adds.

profile change
The consortium system, created through a 2008 law, gains more space every year. It reached the unprecedented mark of 200,000 participants in 2021. “This has to do with people’s economic moment, the transformations we are going through. Today, people don’t necessarily plan to buy a car or an apartment, they don’t have to buy and own anymore. Most think about investing in what we call experiences and services, things like a trip, surgery, exchange, party”, says Cristina Famano, founding partner and CEO of the Eutbem consortium company.

Eutbem is a fully digital company focused on women. According to Cristina, they represent only 35% of the active quotas of the consortia and the creation of the company, in 2021, came to change this scenario. “We see in practice that, even though the consortium is for men and women, we have almost 50% of households headed by women, but, in the world of consortia, they correspond to less than a third. Behind this there is a whole historical issue, we just need to give space and encourage these women”, says the CEO.

Merchant Rosália Castiglioni, 62, is one of Eutbem’s clients looking for a service consortium. In January of this year, she bought two letters of credit for home improvement and plastic surgery. The total amount is R$ 15 thousand, which will be divided into 40 installments. “I’ve already done a vehicle consortium, from home; it’s a familiar path to me, who I discovered when researching the possibilities. In the consortium, I have more openness. I had bought two cards, but one had to freeze because the installments were tight. you can’t do that”, he says.

What is a consortium and how does it work?
Consortia, which emerged in the 1960s in Brazil, are economic and property investments that enable personal, family, professional or business achievements. It is a form of collaborative purchasing. It is as if with each installment, the consortium member participates in a “kitty pool” supervised by the Central Bank to finance the dreams of those contemplated at the time, chosen by lottery or bid. And so it happens monthly, until the end of the group and until everyone has their opportunity to perform.

It can be said that the consortium is a kind of self-financing. The consortium member (the one who buys the consortium) chooses the value of the good he wants to achieve and the amount of monthly fees he wants to pay, according to the alternatives offered by the administrator responsible for managing the group of participating people.

In this model, contemplation can happen in two ways: through sweepstakes where everyone in the group has the same chances, or through a bid offer, which is an extra value that each consortium member can offer. After being contemplated, the consortium member undergoes a credit analysis and, if approved, can use the letter of purchase to purchase the good they want.

Cristina Famano explains in practice: “If someone wants to do an exchange program that costs R$20,000, but doesn’t have that money and doesn’t want to take out a loan and face interest, they start a consortium. She can pay these R$ 20 thousand in 40 months, for example. Then every month she will pay R$ 500 and, suddenly, she will be drawn in the group. If she starts with the idea of ​​going on an exchange and then changes her mind, she can too”, she puts up.

It is worth mentioning that the credit is corrected each year based on the IPCA, that is, whoever leaves at the beginning takes the R$ 20 thousand, but whoever is drawn only later has the guarantee of correction and does not end up at a disadvantage.

Not everything is flowers
Economist and financial educator Edísio Freire warns that anyone who wants to form a consortium needs to know and be able to wait.

“The disadvantage is that the person does not have access to the good immediately, only when it is contemplated. You have to be careful with that. Anyone who is going to acquire a consortium has to be able to and plan to wait”newspaper.

Two other factors need to be taken into account, according to the economist: “First, don’t commit to a monthly installment that you can’t afford. Second, remember that when there is contemplation, you will go through a credit review, so it takes planning.”

What to expect from the segment in 2022?
The Brazilian economy has been facing difficulties to take off. Among the reasons are rising inflation, rising interest rates, scarcity of inputs, little reaction in reducing unemployment and the influence of the dollar – which directly puts pressure on final prices of energy, fuel and, consequently, food. On the other hand, the consortium system has recorded evolution month after month.

“The consortium is suitable for any economic moment in the country. When the market is heated, with many purchases, people look for the consortium as it is a modality that facilitates the purchase. And when the economy is bad, credit clearance is bad and interest rates are very high. Whoever needs to acquire a good looks for the consortium and the entrepreneur also prefers to go to the speculative capital through the consortium than the active capital so as not to decapitalize”, highlights Helton Queiroz, director of the consortium administrator Embracon Salvador.

Queiroz says that, at Embracon, sales grew from 2020 to 2021 and, this year, they continue to be strong. “The market is really hot, so much so that we need to hire more employees. We even opened a new space with a part of our team to test and see if we opened a new branch. The goal is to reach three branches by the end of the year”, he anticipates.

When projecting the business for this year, the president of Abac, Paulo Roberto Rossi, comments that “in 2022, the year in which the consortium turns 60, we will be able, despite the turmoil of an election year, to repeat the good performance achieved in 2021” .

Rossi believes that, despite the projections for 2022 indicating a decline in inflation rates, there will still be relatively high levels of inflation, which keeps consumers more cautious when purchasing goods and services.

“We believe that the new attitude of the consumer, more aware of the responsibilities inherent to the good practices of financial education and personal finance planning, has sought to invest part of their income in a more conservative way, by taking on new financial commitments”, concludes Rossi.