VCR PRODUCERS IN BRAZIL TUNE IN TO THE US MARKET

VCR PRODUCERS IN BRAZIL TUNE IN TO THE US MARKET

For a leading Brazilian electronics manufacturer, two of the most attractive spots in Brazil's consumer market may lie along New York's 46th Street and in Miami's Little Havana.

Of an estimated 600,000 video cassette players purchased last year by Brazilians, 400,000 were bought outside the country or at the Brazilian free- trade zone at Manaus.Many were bought in the United States, where a few well known merchants in New York and Miami cater to Brazilian tourists.

Some of the cassette players were smuggled into Brazil for black market sale. Many entered the country legally by returning tourists taking advantage of their $300-per-person purchase allowance.

And so Sao Paulo-based Gradiente Industria SA, Brazil's third-largest manufacturer of sound equipment, decided to launch the first Brazilian name- brand stereo video cassette player in New York, Miami, Puerto Strausner (Paraguay) and Manaus.

Local stores, by contrast, must wait at least until June to receive the product.

'The Brazilian Street'

Forty-sixth Street is known here as the Brazilian street. And Brazilians constitute Miami's leading group of foreign tourists. Every couple traveling abroad can bring backduty-free purchases up to $600. Video cassette recorders are one of their favorite purchases.

We are not stimulating contraband. We are competing with other manufacturers within the legal $300 limit, Henrique de Macedo Neto, Gradiente's vice president for marketing, told The Journal of Commerce.

Gradiente sees itself competing with Japan's JVC and Panasonic, the two most widely sold brands in the world.

The company is counting on spot distribution at well chosen locations and customer recognition of a Brazilian brand name to chalk up sales.

Incentives to Buy

To further encourage Brazilian buying, the company is offering a user's manual only in Portuguese, a one-year guarantee of service in Brazil, and an electronics system already adapted to Brazil's PAL-M color television transmission and playback system.

Other brands brought in from abroad must have their circuitry adapted and may have no guarantee or service system.

The Brazilian VCRs will cost about $500 abroad - a competitive price in Brazil, where taxes boost the price of Brazilian-assembled-and-sold foreign counterparts to about $750.

Gradiente is the only major electronics manufacturer still lacking a VCR product here.

It follows Sharp, National and Mitsubishi - all associated with name brand Japanese manufacturers - into the field.

Japanese Venture

Gradiente has linked up with an Japanese manufacturer for the VCR venture. The first Gradiente VCRs will all be made in Tokyo, Mr. Macedo said.

Beginning in June, we'll have the parts to start assembling in Manaus, he said.

Brazilian electronics manufacturers import parts and assemble them in the Manaus free trade zone industrial park.

Local input is being gradually increased under a government schedule for the industry.

Gradiente is investing $2 million in new plant facilities at the Amazon River city.

Whether the company sticks to its U.S. market strategy beyond 1988 depends on its degree of success. Mr. Macedo anticipates about 90 percent success in the venture.

The company has ordered enough of the machines for U.S. delivery to last through the end of the year, Mr. Macedo said.

If demand is strong enough, New York and Miami could continue to be two of Gradiente's leading Brazilian outlets, he said.