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Brazil Auto Sales Stay Strong in First Half of July - Fenabrave

Date : 07/17/2012 @ 5:02PM
Source : Dow Jones News
Stock : General Motors Company (GM)
Quote : 33.22  -0.22 (-0.66%) @ 8:00PM
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Brazil Auto Sales Stay Strong in First Half of July - Fenabrave

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SAO PAULO--Brazilian sales of cars and light commercial vehicles in the first half of July jumped 19% from the year-earlier period after tax cuts were put in place, but slowed slightly from sales in the previous month, auto-dealer association Fenabrave said Tuesday.

Sales of cars and light commercial vehicles totaled 170,636 vehicles, compared with 143,916 in the first half of July 2011, and 175,693 during the first half of June, Fenabrave said on its website.

Overall vehicle sales, which include heavy trucks, buses, motorcycles and farm machinery, were up 2.7% from the year-earlier period, but down 1.2% from the first half of June.

Brazil vehicle sales have stalled this year as slumping global growth drags down the Latin American economy. Banks have also pulled back on auto credit this year after Brazilian default rates on auto loans climbed to record levels. In response to slumping car sales, the government in May announced cuts in the so-called IPI tax on manufactured goods as well as reductions in reserve requirements for banks issuing auto loans.

The stimulus measure had a visible effect, boosting daily auto sales to about 17,000 units, from close to 13,000 cars sold a day in previous months. July showed similarly strong daily sales of about 17,000 autos sold per business day.

With the stimulus measures set to expire at the end of next month, however, few expect sales growth this year. Fenabrave said earlier this month that 2012 sales will likely fall 1.5% short of 2011 levels, after previously expecting growth of as much as 5% this year.

Write to Paulo Winterstein at paulo.winterstein@dowjones.com

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