Brazilian auto sales should hold steady or rise slightly in July from June, industry sources told Reuters, in a sign South America's largest vehicle market continues to recover from last year's dip.

To the end of Monday, the 18th business day in July, sales of autos and light trucks totaled 99,700, slightly below June's volume, the sources told the news agency, citing figures from the National Automobile Register, which tracks new vehicle registrations.

If that pace continues to the end of the month, registrations should total 121,860 units, slightly below June's 122,180, the report added.

Reuters said historical data show that sales tend to pick up in the last week of every month, meaning July's total sales should end in line with or slightly above June's.

"The sales have been very volatile month to month. But in my understanding, since September of last year we have had a sustained upward trend," Adriano Pitoli, an economist at Tendencias consultants, told Reuters.

He reportedly is expecting vehicle sales to rise 6.5% in July from June to 130,000 - the increase would be 22.6% higher than in July 2003.

"The industry has passed its worst moments, which were between March and August of last year," he told the news agency.

Reuters noted that vehicle sales fell 3.4% last year as the Brazilian economy slipped into a recession under the weight of high interest rates, rising unemployment and low wage growth, but sales have bounced back as Brazil's economy rebounds from the recession and interest rates fall - the government also briefly helped out the sector with tax breaks.

Vehicle sales rose 11.4% in the first half of the year, according to the National Association of Motor Vehicle Production (Anfavea), Reuters said, adding that the group expects vehicle sales to grow 7.8% in 2004 from 2003.

The top four auto sellers in Brazil in the first half of 2004 were General Motors, Fiat, Volkswagen and Ford, Reuters said.