After a boom year, there are ominous signs of a slow-down in Brazil as car workers at one key automaker are sent on compulsory holiday.

Dow Jones, citing a local car magazine, said General Motors would put more than 7,000 workers on vacation from Monday as new car sales decline.

The workers could be on holiday until 29 November at four facilities in Sao Paulo and Rio Grande do Sul states, according to the report.

The magazine was reported to have said GM officials expected the production schedules to return to normal within “two to three months” and cited tight credit as a reason for sales declines.

Last week at the Sao Paulo auto show, as reported by just-auto’s local correspondent, the four ‘elder statesmen’ automakers in Brazil – including GM – were less pessimistic about the effects of the world credit crisis hitting the Brazilian car market in 2008. They were counting on partially compensating for a shortage of credit through their in-house banks.

GM president Jaime Ardila reckoned 5% growth was feasible next year while all brands producing cars in Brazil expected to expand production and launch many new models in the next four/five years.

They thought the present uncertainties would have faded away by mid-2009 and the Brazilian market would be back on track.