Sky-high rates of car theft in São Paulo are fueled by an international car trafficking industry that reportedly funds Brazil's drug and weapons trades.

According to Brazil’s O Globo, figures recently released by the São Paulo Secretariat of Public Safety indicate that, on average, 583 vehicles are stolen daily in the state. The paper says this means that every two days, car thieves in São Paolo steal more automobiles than are produced in a local Volkswagen factory. Although the crime has been declining in recent years, the numbers are still alarming. Government statistics indicate that there were more than 169,300 car robberies last year, compared with fewer than 215,00 in 2001. Still, according to a recent report by the U.S. consultancy firm C.J. Driscoll Associates, Brazil's vehicle theft rate is four times higher than in the U.S., with rates comparable to Mexico, Argentina and Venezuela.

Car theft in São Paulo has become a highly institutionalized and sophisticated industry, involving a number of different actors, from the thieves and their lookouts all the way up to distributors and vendors. O Globo cites former Minister Jose Vicente da Silva Filho, who claims that many of these car theft networks extend to neighboring countries, such as Paraguay and Bolivia. As InSight Crime has reported, the latter country has even inadvertently fueled this process through a recent amnesty on stolen vehicles in the country.

Because of this law, da Silva Filho says, an increased number of Brazilian cars are circulating in Bolivia, usually luxury vehicles. According to him, many of them are exchanged for cocaine. “There is even an exchange rate for vehicles to drugs; a quality car is worth about 10 pounds of cocaine,” said da Silva Filho. In response, Brazilian officials gave the Bolivian government a list of 4,000 cars that they believed have been stolen and smuggled to Bolivia.

Many cars stolen in Brazil end up in Paraguay -- one U.S. Congress report noted the "booming" business of smuggling cars from Argentina and Brazil into Paraguay and then Bolivia. There have even been allegations of a car trafficking ring involving Paraguayan police that·targeted the Brazilian state of Parana, which borders on São Paulo, and sent cars over the border into the neighboring country. Cars are reportedly taken over Lake Itaipu, which sits on the border between the two countries, on makeshift boats. When they reach the Paraguayan border town they are exchanged for cash, weapons or drugs. The Congress report said that this was facilitated by the laxity of Paraguayan law, which allows illicitly obtained cars to be easily legalized.

Brazil's car theft industry is encouraged by the fact that tracking stolen cars requires a significant amount of investigation, and police in the country generally devote more of their resources to more violent crimes like homicide and rape. Indeed, the lack of public resources to combat this crime has become something of a hot button issue in Brazil in recent years, prompting the country’s National Traffic Council (Conselho Nacional de Transito - CONTRAN) to set a new regulation in 2007 that required all new vehicles to be equipped with anti-theft GPS tracking devices. This is set to come into effect by the end of 2011.

However, given the country's thousands of kilometers of porous international borders, and legislation in neigboring countries which encourages the trafficking of stolen vehicles, it may take more than Brazilian efforts alone to cut the incentives for São Paulo's car thieves.