Back to Headlines Print Version Buzz Up Stumble it Tweet it Facebook LinkedIn

Brazil October Car Sales Down, But Market Stable - Anfavea

SAO PAULO -(Dow Jones)- Brazil sold fewer cars and pick up trucks in October as expected, but the trend is in line for auto makers to have another record- breaking sales year, the National Motor Vehicles Manufacturers Association, Anfavea, said Monday.

Brazil auto makers sold 294,466 motor vehicles in October, down 4.6% from September. The sales decline was expected, however, because September was both an all-time sales record and the last month for a full tax break given to auto makers. New cars had as much as 7% taken off the sticker price. The tax break is being gradually phased out as of September, with 1.5 percentage points being cut in October and another 1.5 percentage points in November before the tax returns to its normal level in January.

That tax break has Brazil on par to break last year's 2.8 million car sales record. So far this year, Brazil has sold 2.6 million cars. Anfavea's projection is to end the year with 3 million cars sold. Brazil could easily surprise to the upside if auto makers manage to sell more than 220,000 vehicles combined this month and again in December.

Brazil's hot car market has been a saving grace for many European car makers, mainly Fiat SpA (FIATY) and Volkswagen AG (VOW.XE), both market leaders. Fiat was the leader in October for two- and four-door cars and sedans, selling 57,135 cars compared with 59,863 in September. Volkswagen came in second with sales of 54,542 compared with 61,250 in September.

General Motors sold 46,941 cars, down from 53,204 in September while its U.S. counterpart, Ford Motor Co. (F), sold 21,381 cars compared with 22,131 in September.

Despite sales slowing somewhat, production increased by 15.7% in October as major auto makers had to rev up production to compensate from a blockbuster September and for increasing exports.

Brazil produced 315,956 vehicles, or 2.64 million, as of Oct. 31.

Exports for October rose 8.4% to $795 million. Lackluster exports have been a drag on the auto makers in Brazil all year, but have been picking up over the last few months and the global recession shows signs of ending. Countries like Argentina and South Africa drastically reduced imports of Brazilian-made vehicles late last year during the start of the global credit crisis.

Brazil exported $6.38 billion worth of motor vehicles as of Oct. 31, down more than 37% from the same period last year.

"We are returning to a more stable sales environment and are expecting the rest of the year to show solid numbers," said Volkswagen do Brasil sales director Gustavo Schmidt last week.

-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@ dowjones.com

  (END) Dow Jones Newswires
  11-09-090822ET
  Copyright (c) 2009 Dow Jones & Company, Inc.