Brazilian vehicle sales rose 24.1% in September from the previous month as falling interest rates and tax cuts helped drive consumers back into the showrooms, an industry group said on Monday, according to Reuters.
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The rise in sales was the first indication that a government-backed programme started in August to kick-start the idling automotive sector, which includes major car companies such as Volkswagen, General Motors and Fiat, might be working, Reuters said.
Brazil’s National Association of Vehicle Manufacturers, or Anfavea, reportedly said some 125,000 cars, trucks and buses were sold in September, up from 100,800 vehicles in August.
September’s sales were nonetheless 3.6% lower than in the same month last year and down 9.2% when accumulated for the first nine months of the year, Reuters noted.
But Reuters said that production and exports rose over the year, however, with output up 5.7% to 163,800 units and sales abroad rising 58.1% to $US580 million as carmakers use foreign markets to try to make up for falling demand at home.
Anfavea president Ricardo Carvalho reportedly said the government’s recent tax and rate cuts were having a positive effect on the industry, even though sales are likely to remain depressed when compared to the prior year.
“Our expectation is that the recovery will be slow,” Carvalho said, according to Reuters.
With Brazil’s economy growing only at a snail’s pace, Anfavea said it had lowered its year-end sales forecast to 1.3 million units from 1.4 million units, meaning 2003’s vehicle sales will be 10% lower than the year before, Reuters reported.
The news agency noted that, in August, the government said it would cut the tax on industrial products, or IPI, that car makers pay on cars with an engine capacity of up to 2,000 cubic centimetres (122 cubic inches) until November and, in return, car companies promised to pass on the savings to consumers and refrain from firing workers.
Moreover, Reuters added, the Central Bank has been slowly lowering its own interest rates since June, making it cheaper for consumers to finance their vehicle purchases.
“If we hadn’t had the IPI reduction, the outlook would be a lot worse,” Carvalho said, according to Reuters.
