Brazil’s top international automakers are likely to report a drop in car sales on Friday due to lower exports but domestic market expectations are still good.


“Exports are still going to be the main weighing factor pushing car sales lower,” Tereza Fernandez, a consultant at MB Associados in Sao Paulo, told Dow Jones. “You are seeing the big car companies selling out of their stocks recently, so one number that might be greater is production, at least when compared to July,” she said.


Market consultants at Tendencias are looking for Brazilian Automotive Manufacturers Association, or Anfavea, to report production around 251,400 vehicles compared with 281,000 in July.


“It’s doubtful that production will be higher, even if they are working through their stocks of unsold cars,” said Alexandre Andrade of Tendencias. “Exports are still disappointing.”


Anfavea data is due on Friday. The National Automotive Dealership Association, Fenabrave, released its sales figures on Tuesday, showing a month on month decline of 9.5% to 247,525 vehicles. Market estimates were for sales around 246,000.

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Anfavea data comes from the carmakers themselves.


An industry executive told the news agency that Anfavea’s August sales should be 258,173 vehicles. General Motors has said its car sales declined to 50,443 vehicles compared with around 56,000 in July.


Nevertheless, market consensus now has car sales rising 6.2% this year to nearly 3m with much of the boost due to a federal tax break that started in December.


The government exempted carmakers from paying an industrial tax, allowing them to reduce new vehicle prices by as much as 7.4%. A study out this week by the government’s strategic planning department said that without the tax break, car sales for the year would have fallen around 14%.


“The tax break definitely helped, but automakers did their part too,” Andrade told Dow Jones. “Credit was extended and interest rates fell, plus we had some new car models out and prices stabilised, so that brought out buyers just as much as the tax break did.”


The tax break ends on 31 October and so analysts are expecting a run on dealerships in October.