Despite the concern of local automakers over government policies that impose high taxes on domestic vehicle sales and keep the Brazilian reais too strong against the US dollar, the automotive industry reported healthy growth in February.

According to the National Association of Vehicle Manufacturers (Anfavea), the industry last month exported 69,553 vehicles in both fully assembled and CKD kit form, up 20.2% compared on the 57,884 units shipped abroad in January. The year on year rise was 8.2%.

February exports brought in revenue of $US707,616m, up 20.2% from January and 14.7% year on year.

Domestic sales were less robust than exports, however, but results were still good. In a month with fewer days than January, and including the Carnival holidays, automakers sold 127,881 vehicles, down 3.8% compared with the 132,890 units sold in January. But, compared with the 114,925 vehicles sold in February 2005, domestic sales increased 11.3%.

In February, Fiat sold 30,289 cars and light commercials to lead the Brazilian market. Volkswagen followed with 27,955 units, ahead of General Motors' 27,093 sales.

Strong export and local sales boosted Brazilian production to the best February volume in history. Automakers built 201,889 vehicles, up 3.3% compared with the 195,395 units produced in January and up 3.9% compared with the 194,326 vehicles built in the same month of 2005.

Rogério Louro