A sudden surge in sales of cars and light commercials is raising the spirits of Brazilian auto industry executives this month.


January had already seen a small reverse in comparison to December. Thanks to the release of some credit and temporary tax relief, sales rose 3.2%.


However, in the first fortnight of February, the rise over January was 15.5% and a daily sales average over 10,000 units confirmed the strength of the recovery.


Medium and heavy truck sales, which better reflect better the state of the economy, have risen 21.3%.


Leticia Costa, president of Booz & Co Consulting, said last week in Sao Paulo that matching 2008’s 2.82m sales this year would be an excellent result. She did not rule out a possible downturn, yet any drop would nonetheless be to 2007’s 2.46m units, still good.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The final tally will, of course, depend on growth in the Brazilian economy. Costa dismissed any possibility of GNP climbing 4% in 2009, the government goal that no one is betting on any more.


For automakers association Anfavea, any forecast is a little troublesome. If optimistic, there will be pressure on the government to end the ‘privileges’ extended to the auto industry by the end of March, as planned.


If pessimistic, there will be calls to extend the excise tax reduction for another quarter.


In that case, there is the risk of new vehicle buyers postponing purchases, halting the reduction of the alarming December inventory, almost two months of sales.


By the end of January this had been whittled down to 31 days of supply, a bit above the ideal, 25-day level. Without inventories back to normal, it is very difficult for automakers to plan production and staffing levels for the next few months.


Production is also tied to falling exports. January shipments abroad collapsed 60% compared to January 2008, now the credit crisis has hit all global markets.


To make things worse, the main export customer for Brazilian cars – our neighbour Argentina – has taken protectionist measures outside the Mercosur trade rules. Meetings have already been held in Buenos Aires but progress was virtually non-existent.


Renault, however, has signalled that the local market might partially compensate for the loss of export production. Some 500 of the 1,000 assembly line workers sent on compulsory, paid vacations for up to four months, were recently hurriedly summoned back to work.


Fernando Calmon