The phasing out of a tax-break (IPI) helped Brazilian vehicle sales to a record September.
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Buyers took advantage of an expiring tax break, but Brazil’s new car prices are set to rise this month, though the impact on the market is expected to be limited.
The Brazilian Automotive Vehicles Manufacturers Association, Anfavea, said that Brazilian vehicle makers sold a record-breaking 308,718 vehicles last month, up 14.9% from September 2008.
The industrial production tax, or IPI, was cut by the federal government in December in an effort to help support the car market. The measure has been largely successful as carmakers passed on the IPI savings to consumers – typically 5-7%.
The tax is being gradually reimposed in a series of adjustments following its extension from June.
The Brazilian car market has also been reinforced by a raft of new models and low interest rates.
Brazilian vehicle sales are expected to hit or top 3m vehicles in Brazil this year, according to the Brazilian Automotive Vehicles Manufacturers Association, Anfavea. In 2008, Brazil sold around 2.8m vehicles.
However, the strong September was tempered by poor production numbers.
Automobile output in Brazil fell in September after an increase the previous month as factories scaled back production slightly while they unload existing inventories, Anfavea said. Output of new cars and trucks slumped 8.4% from September 2008, totalling 275,300 units.
Production has been hit also by depressed export demand and some strike action at some automakers.
