Downside of Brazil's Auto Boom: Air Pollution, 90-Mile Road Jams

Success often bears a high price, and the Brazilian car boom is no exception.

Brazil now has the world's leading emerging auto industry. Since 1990, its vehicle production has doubled. This year, the country will produce nearly 2 million cars, surpassing Italy and moving up to ninth place in world production. By the end of the century, this tropical nation of 158 million people is likely to host 14 different automakers, more than the United States, which now has 11.

But the car boom poses major challenges, from rising pollution to growing trade tensions, analysts say.

"It will also bring some big problems for society at large," says Richard Foster, editor of Brazil Watch, a newsletter.

Traffic and environmental authorities warn that the nation is woefully unprepared for an onslaught of new vehicles. And some industry analysts fear that government incentives to woo foreign investors could decimate the once prosperous domestic auto-parts industry and threaten trade relations with neighboring Argentina.

Within the next decade, industry leaders say they hope to produce 4 million cars annually and double the nation's vehicle fleet, now at 23 million. Experts say that reality would create:

* Traffic tangles in large cities.

* Air pollution and respiratory problems.

* More traffic accidents in a nation already the world champion in road fatalities and injuries.

* Deterioration of the nation's highways. Half are already in poor shape.

Brazil, like the United States, has long favored the car over mass transit, and an infusion of more vehicles would force city governments to stretch already thin budgets for traffic and environmental control and alternative transportation.

"There is no way for our road system to keep up with the amount of cars," says Gilberto Lehfeld, president of Sao Paulo state Municipal Traffic Control Company, who is dubbed the "chaos manager" by the local press. In fact, daily gridlock is so bad in Sao Paulo and Rio de Janeiro that some businesspeople commute to work in helicopters, and many residents leave their homes at daybreak to get to work on time.

In the megalopolis of Sao Paulo, with only 24 miles of subway lines, an estimated 5 million cars and 300,000 trucks cause bumper-to-bumper tie-ups for as far as 90 miles.

In Rio, gridlock costs motorists $700 million annually in lost time, gasoline, and vehicle maintenance, reckons the newspaper, Jornal do Brasil.

"Rio traffic has all the ingredients to drive any mortal crazy," says Claudio Carneiro, a traffic reporter. "There are pot holes, a lack of traffic signs and police, sidewalks converted into parking lots, and a mass-transit system that doesn't meet the needs of the population."

The car boom is raising air pollution levels. Scientists say 5,000 tons of carbon monoxide is released daily into Sao Paulo's atmosphere.

More cars also mean more accidents, observers say. Although official figures are much lower, experts estimate 50,000 people are killed each year - roughly the number of American deaths in the entire Vietnam War. Bad road conditions are a key factor.

Further, poorly maintained roads cost companies $10 billion annually, with much of burden falling on the agricultural sector, according to a recent study by Unibanco. Transport breakdowns cause goods to perish or lose valuable time in reaching markets.

Most economists attribute the car explosion to the growing confidence in the economic stability plan introduced in 1994 by President Fernando Henrique Cardoso and his administration's new rules giving automakers hefty tax breaks and lower tariffs on imported technology, components, and raw materials.

This spells trouble for the once-powerful Brazilian auto-parts industry, which cannot keep up with foreign competitors. There are grim predictions that domestic suppliers will be whittled down to 300 firms in the next several years, from 1,500 in the 1980s.

Just last month, livid Argentine officials said they hoped Cardoso would reconsider a presidential decree that they say would cost their nation $17 billion in lost investments in the next four years. Cardoso's December measure gives a series of generous tax breaks to automakers who set up in Brazil's impoverished north or northeast. Most recently, Asia Motors of South Korea announced it would build the region's first auto plant in the northern state of Bahia.

"The Argentine government shouldn't allow these kinds of unilateral measures," Congressman Humberto Roggero told reporters, suggesting that Cardoso had violated Mercosur, the regional trade pact between Argentina, Brazil, Uruguay, and Paraguay.

In the meantime, the nation's urban planners are considering further restrictions on motorists such as imposing higher parking fees and tolls to enter congested areas, banning cars that don't pass pollution tests, and requiring a minimum number of passengers during rush hour.