Brazilian vehicle sales plunged 31% in September from a record-breaking August as the effect of extended tax breaks wore off for consumers.

Sales of cars and light trucks were also down 8% year on year, dealer association Fenabrave told Reuters.

The flagging sales reflect the diminishing returns of tax incentives announced in May. Originally due to expire in August, they have since been extended to the end of October to bolster an emerging economic recovery, the report noted.

Expectations that the tax breaks would end in August led to a rush of promotions, helping to set an all-time monthly sales record but potentially reducing demand in September.

Fenabrave said 288,100 cars, light commercial vehicles, buses and trucks were registered in September. Its data showed 2.79m vehicles were registered year to date, up 4% year on year.