Sales of new vehicles in Brazil fell in February, manufacturers told Reuters on Thursday, due to recent prices hikes, continued weakness of the economy, and fewer working days than in the same month last year.
The Association of Motor Vehicle Manufacturers (Anfavea), which represents key players like General Motors, Volkswagen and Fiat, reportedly said 104,800 new cars, buses, and trucks were sold in February, 11.3% less than in the same month in 2003 and 2.5% less than in January.
The association told the news agency there were fewer working days this February because Brazil’s pre-Lenten Carnival holiday had fallen in the month –Carnival fell in March last year.
Reuters noted that vehicle manufacturers raised their prices earlier this year to help compensate for increases in steel prices and prices may be reviewed again in March, as February was the last month the sector enjoyed a tax break on production.
Anfavea reportedly said manufacturers produced 154,600 vehicles in February, 1.8% less than in January but on a par with the same month last year.
The association also repeated its prediction of a 7.8% rise in vehicle sales this year, the report added.
Reuters said vehicle manufacturers saw sales drop 3.4% in 2003 as demand suffered from a hike in Central Bank interest rates in the first half of the year after Brazil’s gross domestic product shrank 0.2% in 2003, its worst result in more than a decade.
The Central Bank slashed interest rates by 10% in the second half of 2003 to 16.5% and predicts the economy will grow about 3.5% this year, the news agency added.