SAO PAULO – Brazil’s auto industry recently produced its 10 millionth flex-fuel vehicle, according to Jackson Schneider, president of the National Association of Vehicle Manufacturers, Anfavea.

FFVs, which can run on ethanol, gasoline or a mixture of the two, make up nearly 50% of the domestic market here. The first FFV, a 1.6L Volkswagen Gol, was sold for BR1,074 ($600) more than the gasoline version in 2003.

Today, most FFVs are priced the same or less than similarly equipped gasoline-powered cars. Brazil is the world's largest market for FFVs, followed by the U.S., where more than 6 million vehicles have been manufactured.

However, U.S. car buyers are not as accustomed to filling their tanks with an ethanol mix as are drivers in Brazil, where there is a much better refueling infrastructure in place.

Sales of new vehicles in Brazil through February rose 9.4% over 2009, to 396,820, Anfavea says.

"The sales increase was helped by the favorable economic conditions in general terms, as well as the end of the (industrial products) tax reduction beginning April 1,” says Schneider.

Brazil has increased employment and wages are higher as it recovers from last year’s global recession. “All this, plus the feeling of confidence in the country, has made our market greater," he says.

Anfavea is not pressing the government to continue the manufacturers’ tax reduction, which helped auto makers lower prices on new vehicles during the region’s economic crisis.