Light vehicle sales in Brazil fall 0.9% amid unfavorable conditions

Article by Anita Panait, on January 10, 2014

Light vehicle sales in Brazil dropped 0.9 percent in 2013 after averaging over 10 percent annual growth in the previous 10 years, according to national carmakers' association Anfavea. The slight decline was attributed to weaker consumer confidence as well as tighter credit. Carmakers have been complaining of high taxes and labor costs in the country, but dealers managed to keep business in order thanks to government incentives.

However, sales growth is expected to slow down to just 3 percent annually over the next decade, according to economists advising an association of Brazilian car dealers. Further worsening the slowdown are traffic-choked Brazilian cities and rising family debt loads, which have so far undermined the tax breaks that President Dilma Rousseff offered the auto industry.

While Rousseff's stimulus package helps boost sales when they were launched in 2012, economists warned that they only affected the timing of purchases instead of underlying demand. Dealers are expecting sales to stagnate or drop again in 2014, as Brazil gradually restores its taxes to normal levels.

Higher interest rates and more expensive mandatory safety equipment may affect demand for new cars – thereby making carmaker post lower returns. So far, Fiat S.p.A., Volkswagen AG, General Motors Co. and Ford Motor Co. have made the biggest investments in their sites in Brazil, and accounted for over 70 percent of vehicle sales in the country.

Topics: brazil, sales

If you liked the article, share on:

Comments

Recommended

As seasons change, temperatures rise and fall. The changes affect our preferences when it comes to driving cars. Therefore, Aston Martin introduces the new DB11 Volante or convertible, and it...
by - October 16, 2017
Aston Martin may be known for building many of the stylish Bond cars we see on the big screen but nobody really knew how it can get super aggressive when...
by - October 16, 2017
Today, manual transmissions have become rare in mainstream cars and are more commonly found in performance cars within the $20,000 to $40,000 range. However, the selection of affordable, three-pedal performance...
by - October 16, 2017
We expected to see the BMW i8 Roadster at last month’s 2017 Frankfurt Motor Show, but it never made an appearance. So the question on fans’ lips now is when...
by - October 16, 2017
Jaguar has just released the first official image of its newest offering, the new Jaguar XEL. Essentially the long-wheelbase version of the Jaguar XE compact sedan, the new Jaguar XEL...
by - October 14, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries