1The Metropolitan Region of São Paulo, also known as the Greater São Paulo, Brazil's urban and economic centre, is a national hub for the automotive market. This includes (in)formal and (il)legal economies for second-hand vehicles and auto parts, as well as a large circuit of auctions for salvage vehicles. Every day, in various parts of South America’s largest metropolis, auctions are held, each of which puts up for sale between hundreds and thousands of salvage cars of different types (crashed, flooded, burnt out, recovered from theft, and so forth). Every day, the auctions in São Paulo attract buyers from all over the country, looking for opportunities to do good business by buying salvage cars and “returning” them to the market – as used vehicles “in good condition” or “scrap” for dismantling and parts sales.
- 1 The real names of all the people, companies or locations mentioned in this article have been change (...)
- 2 This research is the product of years of collective effort, which resulted in the publication of Fe (...)
2Salvage vehicle auctions in the Greater São Paulo were our gateway to analysing the used car and parts economies in Brazil. Over the last six years, we have made several visits to some of the largest auction houses in Brazil1. We interviewed auctioneers and people who buy cars at auctions, followed a large number of auctions (in presence and broadcast on the internet), compiled secondary material (such as news, laws and official documents) and produced quantitative data on this market (Pimentel; Pereira, 2022). From this data, we also gained insights into other economies that are fuelled by the purchase of vehicles at auctions, such as dismantling yards and used or crashed car dealerships. In São Paulo, as we discovered throughout our research, there are commercial zones in the city entirely dedicated to the trade of used vehicles and auto parts, many of which originate from auctions, with shops extending for several streets. We have also conducted fieldwork in these spaces in recent years. The analytical issue guiding this paper emerges from the material accumulated over years of multi-sited (Marcus, 1995), collective and collaborative ethnographic research2.
3This paper aims to analyse how state classifications on salvage vehicles produce different regimes of value (Crang, et al., 2013), operating as a mechanism for requalification (and revaluation) of these assets and guiding the ways in which they can be reinserted into the automotive market. These managerial devices have a major impact on pricing dynamics in the second-hand cars trade, which are co-produced by such different – but connected – regimes of valuation. By reconstituting the journeys of salvage vehicles auctioned in the Greater São Paulo, we aim to recompose the genealogy of the state devices that classify them – according to the origin of the accident and the degree of physical damage –, as well as the dynamics of the markets that they will foster, in particular vehicle dismantling and the resale of crashed cars. These economic circuits, although territorialised in specific regions of the Greater São Paulo (usually peripheral regions or their surroundings), feed national economies, connecting them to territories far across the country. As we have seen, the second-hand vehicle and parts economies in São Paulo reach a national scale, fostering consumer markets throughout the country and connecting centres and margins in different territories.
4Cars are objects that mobilise the most diverse transnational production and distribution chains, from the “centres” to the “margins” of capitalism. In a sense, automobility can be thought of as a “system” (Urry, 2005), which encompasses production chains, infrastructures, logistics systems, state regulations and even imagery repertoires and ways of appropriating spaces (Freire-Medeiros; Motta; Fromm, 2023). Not surprisingly, the impacts of automobility in the contemporary world, especially in urban territories, are topics that have been widely studied in the literature (Merriman, 2009; Featherstone; Thrift; Urry, 2005, among others). However, second-hand vehicle markets and their operating dynamics are still understudied. Such markets expand access to vehicle consumption far beyond the unequal geographies of automotive production – even fostering the formation of informal or illegal economic networks (Feltran, 2022).
5Throughout their “social lives” (Appadurai, 1986), vehicles are subject to various classifications, depending on their physical condition, time of production, the amount of polluting substances that their circulation emits, and so forth. These classifications influence their possibilities to be reinserted into the automotive market – such as repair for use or sale as a second-hand car, dismantling for the sale of parts, or even illicit uses through fraud in official documents, as in the sale of vehicles in an irregular situation or the dismantling of stolen vehicles. Such different possibilities also involve specific forms of valuation and revaluation as merchandise.
- 3 Source: National Household Sample Survey (PNAD), Brazilian Institute of Geography and Statistics (I (...)
- 4 The cheapest new car available on the Brazilian market at that time cost around 65,900 BRL – or 13, (...)
6Currently, Brazil has an estimated fleet of around 60 million vehicles, with 28.5 per cent concentrated in São Paulo state (Sindipeças, 2024). This makes it the sixth largest consumer market in the world (Anfavea, 2024). Despite this, vehicles are expensive goods compared to the average income of the Brazilian population. Estimates show that, in the second quarter of 2022, 36.6 per cent of the Brazilian population with some kind of income earned up to 250 US dollars per month3. In the same period, a basic new car cost, on average, 52 times that amount4. This scenario reinforces the importance of second-hand vehicle markets – not surprisingly, the national vehicle fleet has been ageing in recent years, with an average age of over ten years (Sindipeças, 2024). Spaces such as auctions yards, used or crashed car dealerships and vehicle dismantling yards are very important for the national automotive market, and are the stopping points where second-hand vehicles pass through on their journeys of consumption – and where they are requalified and revalued as commodities.
7In Brazil, as in many other territories, second-hand, salvage or end-of-life (and even stolen) vehicles mobilise the formation of (in)formal and (il)legal economic networks (Dewey, 2012; Feltran, 2022), including on a transnational scale (Cohen, 2023; Jacquot; Morelle, 2023; Pimentel; Feltran; Silva, 2022). Such economies, which figure as “backroads” (Knowles, 2014) of the automotive market, represent a significant but little-studied part of the “system” of automobility in the contemporary context (Freire-Medeiros; Motta; Fromm, 2023), and are therefore important objects for analyses both of the connections between large transnational production chains and popular economies on the so-called “peripheries of capitalism”.
8Globalisation is a phenomenon that is not restricted to the upper circuits of the economy (Santos, 2017), or to the large “global cities” (Sassen, 2007) in the so-called Global North. It also takes place “from below” (Tarrius, 2002) and through “backroads” (Knowles, 2014), being formed by frictions (Tsing, 2005). Transnational economies of second-hand goods (Brooks, 2012; Hernández, 2022) and recycling (Alexander; Reno, 2012; Crang, et al., 2013) are productive objects for constructing new representations of globalisation. Such economies often mobilise more dynamic forms of production of value, which continue to unfold through the lifetime of the objects (Houston, et al., 2016). In this sense, they are also productive objects for analysing the economy through an ethnographic approach, contributing to the deconstruction of normative representations of the economic sphere (Bize, 2020; Guyer, 2004; Zelizer, 1988). Economic networks constituted through the transaction of money and goods also involve the transaction of subjective values and social relationships, including relationships based on trust (Beckert 2006; Gambetta 1990).
9Informal and illegal markets are often constructed as “public problems” (Cefaï, 2016), according to a narrative strongly based on a public safety agenda – the fight against crime. Although often represented as separate from the so-called “formal economy”, these markets are pervaded by complex interfaces between the legal and the illegal. They represent a significant part of the contemporary global economy (Beckert; Dewey, 2017) and, at the same time, a possibility of economic insertion for impoverished and marginalised populations in the peripheries of capitalism – albeit in unequal and precarious conditions (Feltran, 2019). In addition, the disputes on the regulation of such economies mobilise various actors, such as criminal groups, agents sited in the margins of the state (Das; Poole, 2004) and even moral entrepreneurs (Becker, 1963). Between social practices and state institutions, the labelling of certain practices as “illegal” involves not a dichotomous differentiation between the legal and the illegal, but complex games with the law, both on the part of state agents and those who are the target of such managerial strategies (Foucault, 2015).
10This paper is divided into four parts. In the first part, we will present the salvage car auction circuit in the Greater São Paulo. In the second, we will start from a crashed car dealership to analyse the dynamics of economies of repair and resale of recoverable vehicles bought at auctions. In the third, we will focus on analysing the dynamics of the vehicle dismantling economy, a possible destination for irrecoverable (end-of-life) cars. In the fourth, we will recompose the political construction of the current instruments that regulate the permitted uses of irrecoverable cars and the vehicle dismantling chain, as well as describe and address illicit practices involving the mobilisation of official documents related to the purchase of vehicles at auctions. Finally, we present brief concluding remarks.
11It is a Tuesday morning in 2019. We are in an auction yard managed by Car Auction Corp do Brasil Ltda, one of Brazil’s largest vehicle auctioneers. This yard is located in the West Zone of São Paulo, in a region close to a major expressway in the city, which is sparsely populated, and whose landscape is marked by the presence of large courtyards and a few precarious shacks built in occupied areas.. This is only one of São Paulo’s many vehicle auction yards and today’s is only one of many auctions that occur every day. In an immense courtyard a multitude of cars is on display, most of them dented and scratched, many recovered after a theft. Men circulate through the spaces separating the rows of cars. They inspect each one carefully while talking on their cell phones and amongst themselves. They take notes and look for good angles to take photos that can be sent via WhatsApp to prospective buyers, business partners, family members and friends. To the untrained eye, the salvage cars displayed in the auction yard look like remnants of tragedies. For those men, they are business opportunities.
- 5 According to the records we kept while observing auctions at the time, the majority of buyers at au (...)
- 6 The amounts quoted were recorded in Brazilian Reais (BRL). For the values quoted in field material (...)
12The auction begins. The auctioneer holds the attention of the audience, while televisions mounted on the walls display information about the auctioned cars on the block. In addition to those who attend the auctions in person, hundreds of others follow the events in real time online5. Cars auctioned in São Paulo may be bid upon and bought by people outside the city or out of state. The search for good deals at auctions has increasingly taken on national proportions. Bidding sessions are very dynamic; they tend to last between twenty seconds and one minute. In a single day, many hundreds of vehicles can be put on the block. That Tuesday morning, in a single hour, 70 vehicles were auctioned and 33 were sold. In the space of that hour, the owner of the auctioned vehicles, Alvorada Seguros (a major car insurance company in Brazil), earned more than 232,000 USD, or 928.7 Brazilian Minimum Wages (MW),6. The auctioneer, who is entitled to a five per cent commission on each sale, earned more than 46 MW, or 11,608.75 USD.
13On the other side of the metropolis, almost thirty kilometres away, the largest auction yard in Latin America can be found. The entity that manages it is called Orlowski Leilões Ltda, which is also one of the main vehicle auction organisations in Brazil. Its huge premises, located on the edge of a major highway in a municipality in the far east of the Greater São Paulo, covers 300,000 square metres. We made several fieldwork trips to this yard and it was there that we became interested in the world of auctions. Orlowski Leilões Ltda also conducts other types of auctions for public and judicial bodies and of other types of goods. Its current focus is on private vehicle auctions.
14The formation of second-hand vehicle and parts economies in Brazil is directly related to the development of the auction market for seized and salvaged vehicles. According to interlocutors heard during the research, this market began to develop around the 1980s, when the São Paulo State Traffic Department (the public body responsible for traffic enforcement in the state) began to hold various auctions to empty its yards, which were full after decades of accumulating seized vehicles. These auctions gradually began to attract popular entrepreneurs, such as second-hand car dealers and dismantlers of end-of-life vehicles. In the following decades, the market for private auctions of salvage vehicles recovered by the insurance market also grew significantly. A milestone in the expansion of this market was the arrival of Car Auction Corp in the country in the early 2010s. It is a multinational salvage vehicle auction company founded in the United States and active in several other countries. The company's arrival would produce a turning point in the country's auction circuit, which until then had been monopolised by a traditional national elite (Pimentel; Pereira, 2022).
- 7 In addition to the bid amount and the auctioneer's commission, the buyer may have to pay other admi (...)
15As in other countries, such as the United States (Larsen, 2020), vehicle auctions in Brazil work according to the “English model”, i.e., through public and ascending bids (Ashenfelter, 1989). When a lot is put up for auction, the buyers compete with each other, offering their bids and following the bids offered by the others, and the highest bidder wins. According to the laws that regulate the auction market in Brazil, auctioneers receive a commission for each sale they mediate, which is 5% of the purchase price. This means that the person or company that owns the property put up for sale receives the amount of the highest bid, while the auctioneer receives a commission of 5% of such amount – the buyers pay both of these costs7. However, the buyers never pay the auctioneer directly, a financial institution always intermediates the transaction, via bank slip or transfer.
16The possible economic uses of salvage vehicles bought at auctions depend on state classifications of such vehicles. Not all of them will be legally able to be repaired and regularised. And even among repairable vehicles, not all will be able to return to a value close to that of similar vehicles in good condition.
Figure 1
Classifications of Salvage Vehicles in Brazil
Diagram produced by the authors
17Vehicle auctions can offer for sale cars of various origins – seized by state agents, recovered from accidents, from financing, from fleet renewal, among others. Between 2018 and 2020, we monitored private auctions held by two leading auction organisations in the São Paulo and Brazilian markets – the already mentioned Car Auction Corp and Orlowski Leilões. At the auctions held by these two organisations, we could see that salvage vehicles recovered by insurance companies are widely prevalent, accounting for more than 90% of the vehicles offered for sale. Such vehicles can be recovered from collision, flood, fire and even theft or robbery.
18Auctions of salvage vehicles act as mediators between the upper and lower circuits of the economy (Santos, 2017) – in this case, insurance companies, large companies with multimillion-dollar annual revenues and small popular entrepreneurs. If on the one hand, according to Garcia-Parpet (1986), auctions as a model of economic transaction are closely associated with the idea of a “perfect market” (including by economic theorists); on the other hand, it is important to address the elements involved in the social construction of such markets. Considering that these auctions mediate interactions between a limited number of large companies and a plurality of small entrepreneurs, it cannot be said that there is exactly a balanced relationship between supply and demand.
19It is difficult to estimate the total sales and revenue of the vehicle auction market in Brazil, as there is no public data available containing such information. It motivated us to produce data manually by monitoring auctions held by these two organisations between the end of 2019 and the beginning of 2020. The data refers to auctions held in the São Paulo Metropolitan Region in three different weeks, with an exact interval of two months between each one. In the weeks observed, both organisations were responsible for holding thirty-three auctions and sold exactly 4,994 vehicles (an average of over 1,600 vehicles sold per week). The total revenue generated by the auctions monitored over these three weeks totalled almost 20 million USD (19,997,022.50 USD). We cannot yet estimate the monthly and annual turnover of the vehicle auction market in São Paulo with statistical precision based on such data. We can, however, use such findings to estimate the orders of magnitude of this market. In our estimation, this is a market with a turnover of around 27 million USD per month, or 324 million USD per year.
20Among the thousands of salvage vehicles auctioned off every day in Greater São Paulo area, some are classified as “recoverable” – in other words, they can be repaired, regularised and put back on the road. As shown in figure 1, these vehicles can be classified as “minor damage” or “medium damage”, according to their physical condition. The following section delves into the possible destinations of these recoverable vehicles.
21Now, we are in a large avenue in the far east of the city of São Paulo, close to the border with the “ABC paulista” – a historically industrial and working-class area, home to some of Brazil's first car manufacturers. As in other parts of São Paulo's east side, the region's landscape reveals some important aspects of urban development in the city's outskirts. The peripheralisation of the working-classes has acted as a mechanism for expanding the city through population densification of remote regions that still lack access to urban infrastructure and services – a movement that Brazilian sociologist Lúcio Kowarick (2024) would call “urban spoliation”. Often, the connection between these peripheral regions and the “city” depended on large avenues, such as the many that cut through the eastern zone of São Paulo. Over the years, as well as important traffic infrastructure, some of them have also become important popular shopping areas.
22That region, specifically, is known for the widespread presence of crashed car dealerships, as well as many other establishments attached to the vehicle market (mechanics' workshops, body shops, parts and accessories shops and so on). In many of São Paulo's peripheral regions, small informal second-hand vehicle shops are common economic activities whose presence has visible effects on its landscapes. The region, however, would gradually become widely known for concentrating a large number of establishments of this type, making up a more specialised circuit and attracting the presence of market professionals. People from all over Brazil come to this part of São Paulo to buy crashed cars, often with clipboards and lists, willing to spend the week in the city. The region attracts buyers from diverse and distant regions such as Minas Gerais, Santa Catarina, Pernambuco and Rio Grande do Sul.
23In 2019, we made our first visit to the region to carry out fieldwork. Among the more than 30 crashed car dealerships operating in the region at the time, there was the dealership owned by Vinícius, Bruno and Pâmela. The dealership operated in one of the many warehouses on the avenue – many of which housed other similar businesses. At the front of the property, there was a courtyard with dozens of beat-up cars lined up and on display for sale. In the back, a small office, which is where we spoke to them. Vinícius and Bruno had set up the business about four years earlier. A little over two years after that, Pâmela, Bruno's wife, had joined it to help with its organisation and bureaucracy. The logic of this type of business is relatively simple, based on buying and reselling cars at auctions. Most of their customers were also second-hand car dealers, who bought crashed cars at below-market prices in order to repair, regularise and resell them as second-hand vehicles in good condition. Each stage of the journey that these vehicles go through before being put “back on the market” allows for a certain profit margin. Repairing and regularising the vehicles allows them to be revalued as goods and put up for sale at higher prices.
24Vinícius had been a seasoned auction attendee long before establishing his partnership with Bruno. Initially, he acted as a professional buyer, buying vehicles for third parties and receiving small commissions for each purchase made. Buying a vehicle at an auction for resale presents an opportunity for good business, but it is not a simple task. One needs to know how to assess the physical condition of the vehicles, calculate the costs of repairing them and evaluate the possible profit margins with their resale. All these procedures require specific practical and specialised knowledge, which is why hiring the services of a professional buyer can help minimise the eventual risks. This also partly explains why some entrepreneurs who repair and resell damaged vehicles prefer to buy them from car dealerships rather than directly from auctions. After some time, Vinícius decided to use the practical knowledge he had accumulated from his experience attending auctions in a business of his own.
- 8 The FIPE table is produced by a research institute linked to the University of São Paulo (USP) and (...)
25Bruno, Vinícius and Pâmela’s shop began by focussing on selling low-cost cars. Most of the vehicles on display in the shop's courtyard were being sold, during the first field visits, at prices below 5,000 USD, or 20 Minimum Wages, the average value at that time for a basic car with 7-8 years of use, without breakdowns, in Brazil. Some of the cars on display were visibly damaged, while others had a few nicks and dings, being advertised as “no claims” (i.e., no record of damage to their documents). According to Pâmela, the selling price of each of these vehicles is defined individually, taking into account the amount spent on acquiring the vehicle at auction, regularising the documents and carrying out a few repairs. All of these prices – from new car dealerships to used car shops and auctions – are based on the FIPE table8. In each car she puts up for resale, Pâmela tries to establish an intermediate price between her recovering costs and her expected profit, while remaining competitive compared to other sellers in the market.
26Calculating the value at which a vehicle can be sold involves a number of factors. If, after being repaired and regularised, it can be sold as a “used vehicle in good condition”, its sale price may be higher, closer to the FIPE table value. If it has damage, fines or tax debts, a theft or accident record, its value will depreciate. This is where state classifications of these vehicles when put up for sale at auctions play a central role in the economy of repairing and reselling salvage vehicles. Recoverable vehicles can be categorized into two types, “minor damage” and “medium damage”. While “medium damage” vehicles will have an accident history recorded on their documents, “minor damage” ones will not. This distinction allows for the omission of accident and auction history during resale, potentially preventing a decrease in the vehicle's selling price.
- 9 According to Fromm and Motta (2022), in recent years the Brazilian insurance market has been mobili (...)
27Even in the absence of records in official documents, there are other ways of accessing this information. Insurance companies, for example, maintain expansive databases of vehicles that have passed through auctions, and even tend to make it difficult for them to be insured once they have been repaired and regularised – even though the overwhelming majority of them have been put up for sale by the insurance companies themselves. In the Greater São Paulo, as in other urban centres in Brazil, the threat of having one's car stolen is a major driver for taking out car insurance. This makes it more difficult to hide information about an auction. However, the access to car insurance in Brazil is still very much blocked for clients considered “high risk” – for example, people who own cars that are old, highly targeted by thieves or who live or circulate in areas with high theft rates –, which makes it restricted and excluding9. These disparities in access to insurance and information highlight that the unequal distribution of opportunities and resources has an important territorial dimension, even for those like Pâmela.
28Now we are in a morning of 2022, in another area on São Paulo's east side, on a long but narrow avenue, a kind of “urban frontier” that connects more upscale areas to working-class neighbourhoods on the outskirts. This avenue is one of the many areas of the city known for its large concentration of vehicle dismantling yards – establishments that sell parts taken from end-of-life vehicles (including irrecoverable vehicles sold at auctions). The large presence of dismantling yards has a visible effect on the region's landscape, composed of elements such as scrap vehicles and parts, accumulated inside the establishments and along the sidewalks. There is also a lot of traffic, and the coming and going of customers in search of car parts is remarkable. Many go in and out of the region's dismantling yards in search of a particular part. They rarely find what they want on the first try, it seems.
29Paulo owned a car dismantling yard in the area for many years. He started his business in the early 1990s. Throughout his career in this market, he has experienced and even actively participated in some of its contemporary displacements. He claims that when he started his business, the market as a whole functioned in a fairly informal way. Even so, he is proud to say that he has always worked “legally and honestly”. Over the years, he was able to accumulate money by dismantling cars and selling their parts. His business grew and became more professional. At the same, he still complained about the “unfair competition” practised by agents who acted “illegally” – in other words, who sold parts from dismantled stolen vehicles. In addition, since the illegality of the dismantling yards was presumed by inspection agents, even “legal” ones were subject to regular bribe payments to police agents, who acted as a protection market (Misse, 2018) for clandestine dismantling. According to Paulo, the absence of stricter state regulation of this market favoured the actions of the “illegals”. He was one of the businessmen in the sector who actively participated in the process of implementing the “Dismantling Law” (State Law 15.276, implemented in 2014), considered by many to be a milestone towards the “formalisation” of this activity.
30The dismantling of end-of-life vehicles for the sale of spare parts is an old activity in Brazil's urban outskirts – especially in São Paulo, which is also the major national hub of this market. In a sense, it can be seen as an “economy of leftovers” (Bize, 2020), which represents a possibility of economic use for end-of-life vehicles, and also for the consumption of auto parts at more affordable prices. Such activity is important for the second-hand vehicle market as a whole, as the repair of recoverable salvage vehicles often requires parts taken from dismantled end-of-life vehicles. The possibility of acquiring parts at more affordable prices is one of the many elements that influence the possibility of extracting a higher profit margin from the repair and resale of salvage cars.
31The dismantling economy is also closely connected to the auction circuit – which is still the biggest channel for buying vehicles for dismantling on a large scale. At auctions, scrap vehicles can be sold for up to 90 per cent below the FIPE table. Although there are no fixed prices at auctions, the degree of physical damage to the vehicle (as well as how this damage is categorised) is often reflected in its sale value: more damaged vehicles tend to be sold for lower prices. In this case, however, other types of calculation and practical knowledge are required to make a “good deal” from buying cars at auctions. This is because the profit in this case will not come from repairing and reselling the car, but from selling the usable parts that the dismantlers will extract from it – especially those of higher value, such as the engine or the gearbox. Therefore, it is necessary to assess the usability of car parts and estimate their potential selling price. This valuation process does not rely solely on the FIPE table, but rather on the average market prices for new and used spare parts. This information can be obtained through practical experience, personal networks and the use of digital tools. Selling all the usable parts from a single vehicle can take many years. As a result, dismantling yards often operate on a logic of accumulation: those who manage to gather a large volume and variety of scrap cars and parts in stock can earn a more constant income.
32When it comes to recoverable salvage vehicles, the state classifications make a distinction between those that will have claims recorded on its documents (“medium damage”) and those that will not (“minor damage”). Claim records depreciate the market value of the car, and can also influence the costs of having them repaired and regularised. They operate hierarchical differentiations of value, which are measured through a common valuation regime. End-of-life scrapped vehicles, on the other hand, trigger a completely different value regime (Crang, et al., 2013). The exchange value of these goods is estimated based on the possibility of selling their usable parts. They are not valued as “cars”, but as “scrap”, as raw materials for the second-hand parts sector. The exchange value of such requalified and revalued goods, however, will influence the process of repairing salvage vehicles, as well as the pricing of the vehicles when they are put back on the market.
33Paulo's journey as a dismantling yard owner in São Paulo reveals some interesting elements in the territorialisation of this market in the city. Since he opened his dismantling yard in the early 1990s, his establishment has moved to different locations in the eastern zone of São Paulo. These changes were prompted by the search for spaces with more suitable facilities, both to optimise their day-to-day operations and to comply with legal requirements. Even before the “Dismantling Law”, environmental and civil defence permits were legally required for the operation of dismantling yards (of course, such requirement could be reinforced by discretionary and extra-legal ways). Over the course of the 1990s and, especially, the 2000s, both the growth of the market and the increase of state regulation over it drove a demand for a more specific territorial profile: areas with ample availability of spacious commercial warehouses, capable of housing a large volume of “scrap”. Thus, large avenues which occupy this position of “urban frontiers”, connecting peripheries to more centralised and elite areas, with a large influx of people and the availability of large properties at low cost, become strategic territories for the installation of dismantling yards.
34A few years ago, however, Paulo decided to move his dismantling yard again. Among the many reasons for this decision, he complained about the expensive rent. In conversations with other dismantling yard owners in the region, complaints about the expensive rents were common – even though the properties often did not offer good infrastructure and could even pose a safety risk to employees and customers. The concentration of dismantling yards would have inflated the costs of renting a warehouse in the area. Against this backdrop, Paulo decided to move his dismantling yard to a municipality in the interior of the state, on land of his own located on the side of a motorway, in a region without any urban densification. To a large extent, what makes Paulo's decision possible is the use of e-commerce platforms as a sales tool. Although he is located in a region without any urban centres and without a considerable flow of face-to-face buyers, Paulo can sell his parts to customers all over the country. By leveraging both physical and digital infrastructure, Paulo's dismantling yard connects online and offline flows, enabling him to reach distant territories and operate on a national scale.
35The use of e-commerce platforms is producing a number of contemporary shifts in the vehicle dismantling market. It involves, for example, a demand for rationalisation and optimisation of their day-to-day operations, representing an element that reinforces a way of working in accordance with a “formal economy” ideal. It is still too early, nonetheless, to say that Paulo's move from a region with many dismantling yards in the city of São Paulo to a far-flung region in the interior of the state represents a trend related to this process. Even with the expansion of online sales, dismantling yards still tend to concentrate in urban regions with a large influx of in-person buyers – especially in the Greater São Paulo, which is still the main national hub of this market. However, even dismantlers operating in these regions have reported that, recently, the proportion of online sales has been rising in relation to face-to-face sales. Certainly, these recent changes will impact some future shift on spare parts valuation processes.
36Currently, ten years after the implementation of the “Dismantling Law”, and after the widespread use of e-commerce platforms, there are around 900 formalised vehicle dismantling yards registered with the São Paulo Traffic Department – around 44% of which are concentrated in the capital and metropolitan region of São Paulo. Yet, not all of them have been able to adapt in the same way to the dynamics of formalisation and modernisation of this market, which are currently underway (Pinho; Zambon; Silva, 2022). In this sense, the process of “formalising” the vehicle dismantling market, far from having a homogeneous reach, has produced a kind of exclusionary formalisation (Rangel, 2019), making it more concentrated and stratified.
- 10 At the time the scene took place, the Dollar - Brazilian Reais conversion was around 1 USD - 2.17 B (...)
37Let us go back a few years in time. In early 2009, a 2007 Chevrolet Meriva, classified as salvage and recovered from theft, was listed for auction on a traditional Brazilian auction website. Despite being completely plucked up, the vehicle was not categorized as end-of-life, theoretically allowing for its repair, regularization and subsequent resale. The estimated selling price was approximately 25,000 Brazilian Reais, which at the time was equivalent to around 11,500 USD10. Back then, the market value of a similar vehicle in good condition was estimated at 40,000 BRL, around 18,400 USD. Given these figures, buying this vehicle for repair, regularisation and resale as a second-hand car seemed like an economically unattractive deal. Nevertheless, another reason could explain the interest in buying this car: its documents. In possession of the car's document, a receiver of a stolen vehicle of the same model could rebrand its chassis number and produce a “cloned vehicle”.
Figure 2
Plucked 2007 Chevrolet Meriva advertised on an auction website
Source: Alesp (2009, p. 6)
38The above complaint was made public in an official enquiry set up in the Legislative Assembly of São Paulo in 2008, which aimed to investigate illicit practices on the part of insurance companies – most of them linked to the automotive insurance sector. Among the various complaints directed at insurance companies, one concerned the sale of irrecoverable vehicles with documents at auctions – in this case, auctioneers would also be directly involved. This would be an illegal practice since there were already laws establishing the obligation to write off end-of-life vehicle documents.
39This complaint is an interesting object for analysing the political disputes on the state regulation of the disposal of end-of-life vehicles – and, not least, its documents, which are valuable objects for criminal networks involved in car theft. As mentioned earlier, there is a relationship between the degree of physical damage of vehicles bought at auctions and the degree to which their market value depreciates. This is especially true for end-of-life vehicles. Thus, the possibility of buying these vehicles at low prices along with their documents represents an opportunity for thieves and receivers of stolen vehicles. Such documents would allow for the production of a “cloned vehicle” so that a similar stolen vehicle could be used and even resold as a second-hand vehicle in good condition and “legal”. Second-hand cars can also be requalified and revalued as merchandise through illicit practices.
40During this enquiry, several other complaints were made against insurance companies, which are also of interest to the discussion proposed here. One of them concerned the use of second-hand spare parts of “dubious origin” (i.e., from dismantling yards) to repair damaged vehicles that did not end up going to auction – that is, cars that should be repaired by the insurance companies and then returned to their owners. The legislation of the time did not allow insurance companies to use second-hand car parts to repair vehicles. Furthermore, before the implementation of the “Dismantling Law” in 2014, state regulation on the second-hand parts trade itself was a “grey area”. State regulation of the disposal of end-of-life vehicles (and its documents) and state regulation of the vehicle dismantling economy are distinct but convergent agendas. Both of these demands are associated with the fight against illegal practices that are different but equally connected to vehicle theft – the production of “cloned vehicles” and the dismantling of stolen cars for the illegal sale of parts. Dismantling is a common destination for stolen vehicles in São Paulo (Feltran, 2022), since it is a tactic mobilised by thieves and receivers to hide them and to make an economic return by selling their parts.
41The 2000s marked a period of prosperity for the Brazilian automotive market, with the national industry reaching its peak production levels (Anfavea, 2024). Moreover, the implementation of policies to stimulate consumption and credit, especially aimed at the low-income population, led to an increase in the Brazilian population's buying power. The new vehicle market, boosted by an increase in new car sales, became increasingly large and diversified with the liberation of imports in the 1990s and also with the installation of production facilities of major global brands in Brazil. At the same time, through the mediation of vehicle auctions, these innovations in the new car market were also gradually reaching the second-hand vehicle and parts markets.
42In the same context, records of vehicle theft and armed robbery in the state of São Paulo also increased considerably, which raised a public debate around the formulation of strategies to combat these criminal practices. As well as the “legal” car market, illegal economies attached to it also experienced a period of economic boom in this context, at the same time as vehicle theft was consolidating itself as a problem that required state intervention. Thereby, two different projects for state intervention in the vehicle dismantling economy came into dispute: the criminalisation of this activity – in this case, end-of-life vehicles would be destined for pressing and recycling of ferrous material – and its “formalisation” – in other words, the state regulation of the vehicle dismantling chain (Motta, Maldonado, Alcântara, 2022).
43This dispute between different actors, mobilising different discourses of justification (Boltanski; Thévenot, 2006), lasted more than ten years. The attempt to criminalise vehicle dismantling did not succeed and, in the end, the economic advantages of the opposing bill, which proposed regulating it, weighed in favour of implementing the “Dismantling Law” in 2014. The political articulation on the implementation of such law mobilised both entrepreneurs in the sector (including Paulo) and actors attached to other markets that participated in the economic chain of vehicle dismantling, such as auctioneers and the insurance industry (Pimentel; Pereira, 2022; Fromm, 2022). There were different actors who took part in this process as moral entrepreneurs (Becker, 1963) linked to the private sector.
44The “Dismantling Law” introduced a series of procedures for formalised dismantling companies. Here we highlight two of them: the obligation to be regularised with the São Paulo Traffic Department, in order to operate as a dismantling company and also to have access to the purchase of end-of-life vehicles at official auctions; and the obligation to label higher-value parts. The São Paulo Traffic Department's traceability labels have a QR Code, which allows information to be consulted about the “origin” of the part – from which vehicle it was taken, from what person or auction this vehicle was bought, which dismantler acquired this vehicle, and so on. This information is registered through a digital system – a procedure also established by law.
Figure 3
The São Paulo Traffic Department's used parts traceability labels
Source: DETRAN-SP (São Paulo Traffic Department). Author not informed
45The traceability labels, as technopolitical devices (Hecht, 2011), were intended to help make a clearer distinction between the journeys of parts of “legal” and “illegal” origin, making it easier to identify parts of “illegal origin” and to punish those who sell them. Interlocutors heard during this research came to associate the use of the labels to a shift in the dynamics of bribe collection by police officers. According to them, before the labels, the illegality of dismantling yards was presumed, which is why even entrepreneurs who acted “within the law” were subjected to paying such bribes. After the labels, however, any illegalities supposedly became more evident. As a result, these extortionate practices would now be aimed more specifically at “illegal dismantling”, which would have made the operation of such criminal networks more expensive and less profitable. In the end, this would have contributed directly to a significant drop in vehicle thefts and armed robberies in the state since 2014.
46These new legal procedures established by law however, did not result in the end of illicit practices involving the purchase of salvage vehicles at auctions. In fact, they did mark a turning point in practices involved in the fraudulent mobilisation of official documents. If, on the one hand, buying end-of-life vehicles at auctions no longer entitles you to the car's documents, on the other hand, there are still other types of documents that can be used for illegal practices. The mobilisation of invoices relating to the legal purchase of vehicles at auctions exemplifies this. According to several reports heard during visits to dismantling yards, receivers of stolen vehicles can (and frequently do) use invoices for end-of-life vehicles legally bought at auction to hide parts from similar cars that have been stolen and dismantled clandestinely. Furthermore, according to these reports, a single invoice could be used to hide parts from several cars of the same model. Reconfigurations of state regulation mechanisms, implemented to inhibit illegal practices, also produce reconfigurations of these practices themselves, revealing complex connections between the legal and the illegal.
47The used car and parts trade in Brazil mobilises economies and regulations on a national scale. In a scenario where cars are highly demanded and desirable goods, but whose cost is very high, popular economies that make access to their consumption more affordable are becoming increasingly important. Such economies extend the useful life of salvaged vehicles, increasing their chances of being requalified and revalued, preserving their status as a commodity in demand and with exchange value even when it comes to an end. Through such economies, road infrastructures that connect the centres to the outskirts of the São Paulo metropolis – spaces of circulation used by the working-classes in their everyday life – also become strategic territories for the popular consumption of cars. Consequently, such regions that connect the outskirts of São Paulo are also connected to other diverse and distant regions of the country. The trajectories of salvage vehicles that are auctioned off every day, destined for resale or dismantling, reveal these connections.
48Throughout the journeys travelled by such objects, the possibility of requalification and revaluation as commodities is seen and explored as an opportunity for “good business” by popular entrepreneurs, criminal actors and large “formal” companies and business men, such as auctioneers and the insurance market. They all seek to take advantage of the opportunity that these cars offer in any way they can, even in a very unequal way. Some seek to increase their profit margins by reselling or dismantling salvage cars through practical knowledge and personal networks to help them navigate the state classifications managing their destination, sometimes exploring their loopholes. Others seek to increase their already millionaire incomes by actively positioning themselves as political agents directly interested in the construction and implementation of such managerial devices – which involves producing and reinforcing the boundaries between the legal and the illegal, but also benefiting from loopholes in the law. For a large contingent of impoverished and criminalised people, these economies sited at the margins – of both the city and the formal market – represent work and income opportunities. For the global economy, they represent the capillarisation of production chains and the expansion of capital accumulation.