Brazilian Automobile Industry Bets on Renewed Growth and Increases Production

02/07/2017 - 13h36

The year got off to a start with a decrease of 5,2% in sales of passenger cars and commercial vehicles (light and heavy) but this news wasn't enough to dent the hopes of the Brazilian automobile industry.

The sector continues to predict renewed growth in business still within the first half of the year.

This optimism is based on data: the manufacturers had managed to significantly reduce their vehicle stocks at the end of 2016 and are now rushing to meet orders from their dealer networks.

Production increased by 17,1% in January compared to the same period of last year.

According to Anfavea (the national manufacturers' association), the number of vehicles in stock at dealers remained stable in January (around 135 thousand units), but there are 51,4 thousand vehicles on the manufacturers' docks - an increase of 22% compared to December.

For retailers, the increase in demand for cars can be explained by the increase in the supply of financing credit.

The automotive sector has time travelled back by 11 years: with sales of new vehicle registrations at the same levels as in 2006.

In 2012, Anfavea projected that the national domestic market would arrive in 2017 with the capacity to absorb at least 4 million passenger cars and commercial vehicles.

Based on current calculations - that estimate growth of 4% in 2017 over last year - new vehicle registrations should be slightly in excess of 2,1 million automobiles.

The level of employment remained stable between December and January, but there are 10,5 thousand employees temporarily laid off or in the unemployment program.

Translated by LLOYD HARDER

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