June could be the best month for new car sales for more than six months, reversing a decline that has seen sales slip by as much as 10% from year ago levels.
The upbeat assessment came from dealer group Fenabrave which told reporters in Sao Paulo that it expected daily sales of cars and light trucks to reach 13,500 – about 1,000 more per day than in May. Car and light truck sales in May were up 12.1% on the month to around 274,500 units.
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If the forecast was right, it would be the highest daily demand registered this year. Dealers are having to cope with the highest inventory levels since November 2008.
The slump in sales has forced car makers to idle lines and lay off workers despite government attempts to offer tax incentives and lower interest rates to boost demand and protect local manufacturers. Brazil’s auto output in May fell 7.7% from the same month a year earlier and the industry’s accumulated production in the first five months of the year remained about 10% below the same period of 2011 according to national automakers’ association Anfavea.
Observers blamed part of the sales slump on Brazil’s lack of infrastructure investment which has led to massive traffic jams in the country’s major cities – buying a car you can’t drive anywhere seems pointless to many urban dwellers.
