After achieving its best month ever for new car sales in June, Brazil’s market fell almost 5% in July vs that record month and almost 1% over the same month a year ago according to data from Brazil’s Motor Vehicle Manufacturers Association, Anfavea.
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July’s drop came as no surprise, however. One of the main reasons for the decline is that consumers expected a tax break on new car sales to end in June and raced to buy cars at discounts of as much as 7.4%. The tax break has now been extended through October.
Sales for the January to July period are up by 2.4% to 1.73m units. Anfavea president Jackson Schneider said that despite the decline, July registered the third largest number of sales in the industry’s history.
He added: “We will produce 2.6m cars this year just for the local market, and that’s more than the 2.4m we did last year.”
Car sales in Brazil started to decline last October when the banking crisis in the US and Europe stalled Brazil’s economy, and credit dried up but has since revived thanks to government measures.
Tax breaks have been extended twice this year, once in March and again in June. Both months saw explosive sales, with slowing production and sales figures the following months.
However July exports declined 3.2% to $618.3m and were off 50.1% compared with July 2008. All told, export revenue is down 49% to $4.15bn from January to July compared with the year-earlier period. Production is down 12.9% as a result, to 1.75 million units, according to Anfavea.
Volkswagen was the market leader once again in Brazil with 59,016 cars sold in July, down from 61,844 in June. Fiat sold 57,772 cars compared with 59,877 cars in June. General Motors sold 47,428 cars, down from 50,232 in June.
So far this year, Volkswagen has maintained market leadership in the two- and four-door passenger vehicle class, selling 359,763 units, up 13.9% on the year. Fiat has sold 345,838 units over the January to July period, down 0.4%. General Motors sold 275,158 cars, down 7.3% on the year, and Ford sold 135,266 cars in the first seven months of the year, up 22.3% from January to July 2008 sales.
