During 2013, predictions for the Brazilian domestic market shrank steadily, following successive revisions downwards of forecast GDP. After nine consecutive years of expansion, with records tumbling annually, total sales of light and heavy vehicles went into reverse.
Nonetheless, 2013 ended as the second best year on record, after 2012. Sales contracted 0.9% to 3.76m locally made and fully imported units compared with 3.8m the previous year.
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Brazil still – as expected – ranked fourth largest global market after China, the United States and Japan, as predicted by a handful of consulting firms.
Despite tax cuts, tight credit by banks hit by loan defaults in recent record years slowed sales.
Sales of locally made cars rose 1.5% over 2012 while imported cars slipped 10.3%. Imports’ share of registrations in 2013 was 18.8%, the lowest in recent years.
That result clearly reflects the changes wrought by the Inovar-Auto régime in stimulating investments in local production and taxing imported vehicles.
Last December the European Union, with the World Trade Organisation, asked the Brazilian government for clarification of the Inovar-Auto rules which have slowed exports from Europe.
Last year saw two notable records: production and exports by value. Output rose 9.9% to 3.74m units from 2012’s 3.4m.
Exports by value rose 13.5% to US$16.6bn thanks to devaluation of the Brazilian real and higher sales in Argentina and some imports were replaced by locally made models as well.
The tally included spare parts to keep the growing Brazilian made fleet abroad on the roads.
By unit, exports in 2013 rose 26.5% to 563,300 vehicles but that was far below the almost 900,000 shipped in 2005 when exchange rates were even more favorable and world markets had not yet been hit by the 2008/2009 financial crisis.
Manufacturers association Anfavea has forecast a 0.7% production increase for 2014, a 1.1% rise in registrations, exports by unit up 2.1% and exports by value up 2.6%.
This year will be very much affected by a smaller number of working days thanks to world cup football and several elongated holidays.
Sales are expected to start rising more steeply by 2015 boosted by infrastructure spending, lower interest rates and more factories making vehicle models previously imported, adding additional competition which will cause prices to fall.
