Brazilian vehicle sales should rebound 7.8% in 2004 after an economic slowdown in 2003 led sales to fall to their lowest level since 1999, the country’s main motor vehicle industry group said on Thursday, according to Reuters.
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The Association of Motor Vehicle Manufacturers (Anfavea) forecast that the sector would sell 1.54 million cars, buses and trucks in 2004 in Brazil, after annual sales dropped 3.4% last year to 1.43 million units, the report said.
“I think the worst is over and that we are in a recovery,” association president Ricardo Carvalho reportedly told a news conference, adding: “I hope this recovery lasts throughout the year.”
Reuters noted that Brazil’s automotive sector suffered as the Central Bank jacked up interest rates to a four-year high to slow inflation and dragged the economy into a recession in the second quarter.
The bank has slashed rates by 10% since June and says the economy posted negligible growth in 2003 but should expand 3.5% in 2004, the report added.
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By GlobalDataAccording to Reuters, in a sign the industry may already be turning the corner after the year’s tough economic conditions led to layoffs and wage disputes, vehicle sales in December hit a record and were nearly 32% stronger than in the same month in 2002.
Carvalho reportedly said the big monthly gain was due to a cut in the so-called IPI tax on the production of industrialised goods since August, end-year sales promotions in showrooms, and lower interest rates which helped make financing cheaper.
“It was the best December in history,” he said, according to Reuters.
According to the news agency, Anfavea said Fiat maintained its lead in sales of cars and light trucks in Brazil in 2003 with 340,682 units sold, a 4.7% drop in relation to the previous year. General Motors came a close second, while Volkswagen was third, and Ford came fourth.
Reuters said exports were another bright spot as revenues from the sale of Brazilian vehicles abroad totalled $5.5 billion, almost 38% stronger than in 2002 while Anfavea predicts export revenues will grow 5.5% in 2004 to $5.8 billion.
Anfavea also reportedly said that, despite the weak consumer demand in Brazil, the sector produced 1.83 million vehicles in 2003, 2% more than over the previous 12 months.
Reuters said the association has forecast that output would accelerate 8.9% to 1.99 million units this year though Carvalho reportedly said, however, that production was still at only 60% of the industry’s total capacity.
Association records show manufacturers sold 1.25 million vehicles in 1999, the year Brazil’s government devalued its currency, as the economy was buffeted by crisis of investor confidence in emerging markets, Reuters added.
