It is difficult to determine clear signs for the Brazilian market for the end of this year and 2014.
What is known is that early 2013 optimism faded away as the months went by. Analysts are divided among those who forecast sales a shade below 2012 (off 0.5% to 1%) and a small increase (1% to 2%) for cars plus light and heavy commercials.
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Anfavea (the industry group association) is betting on the increase.
If that happens, it would be the 10th successive year of domestic market growth, partly leveraged by periods of temporary IPI tax cuts which led to continuous record breakages, helped by easy financing and an increase in buying power.
At the recent Autodata Perspectives 2014, a two-day conference in São Paulo City, general opinion was that of a market slowdown, but no drop, next year. On the other hand, production – always important for sustaining jobs in the value chain – should climb steadily in 2014 shielded by decreasing imports and improving, albeit modest, export volumes.
Some automakers showed less optimism than others. Speakers (CEOs and VPs of the main brands) talked of future excess capacity, fierce sales promotions and aggressive rebates.
Yet there were those that considered production is manageable in a market less prone to fall but more likely to grow closely following GNP in the next few years. And promotions are here to stay.
There are expectations about maintaining current, lower IPI tax rates, at least for the first quarter of 2014. This is taken for granted as it would otherwise lead to a year-end buying frenzy to avoid higher prices.
However, entry level cars will become more expensive (BRL400/US$170 to BRL800/$340) when all light vehicles must be fitted with dual airbags and ABS brakes from 1 January.
Until March 2014 it will be possible to buy models produced without these safety items, after that their sales will be banned.
Therefore, all signs are a bit contradictory.
A federal truck renewal plan would be welcomed by the auto industry along with recycling and scraping processes. A second phase could encourage replacement of older light vehicles.
