For the fourth time this year, Brazilian automakers association Anfavea has reviewed home market sales, production and export forecasts. In December last year it predicted zero growth for sales this year, then 13% and 21% declines.
Now it sees registrations of new cars, light commercials, trucks and buses dalling 27.4% this year to 2.54m, matching the 2007 level. Production is seen down 23.2% to 2.42m, volume similar to output in 2006.
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That slightly lower production downturn is linked to a 12% rise in exports to 375,000 fully assembled units. But they will be worth 11% less in dollars this year becuase the average vehicle price is down compared to 2014 due to the Brazilian real devaluation.
Hit by strikes as well as planned downturn, production last month was 42% down on September 2014. Dealer inventories fell only from 53 days' stock to 52 – 347,000 vehicles or 50% than the ideal volume in normal market conditions.
Banks more selective when making loans and a lack of buyer confidence are obstacles to families taking on any more debt so there is now strong demand for used vehicles up to three years old. Sales of all used cars are 5% higher than this time in 2014.
Anfavea sees no recovery until the third quarter of 2017 while a return to 2012’s circa-4m registrations a year is five years off at least.
Last month saw the end of the 45-year rule making a fire extinguisher compulsory in cars and light commercial vehicles (95% of total sales) but the manufacturing cost reduction was so minute it was not reflected in retail prices and automakers are taking a little extra profit.
