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Vehicle output is now expected to reach 3.34 million units, down from Anfavea's January prediction of 3.76 million cars.
The new estimate represents a decline in production of 10% year-on-year in 2014, Anfavea president Luiz Moan said on Monday July 7.
Car sales to the domestic market are now predicted to fall by 5.4% in 2014, to 3.56 million units, against the group’s January forecast of a 1.1% increase, to 3.81 million tonnes.
Anfavea also revised its estimate for vehicle exports.
Exports are now expected to drop by 29.1% year-on-year in 2014, to 401,000 units, against a previous prediction of a 2.1% rise, to 575,000 cars.
Weak activity in the first six months of the year is behind the revision, Moan said.
Brazilian carmakers produced 1.57 million units in January-June 2014, down by 16.8% year-on-year, according to Anfavea.
Car sales to the local market declined by 7.6% in the same comparison, to 1.66 million vehicles, while exports fell by 35.4%, to 169,457 units.
Moan said the decline was due to fewer working days in the first half of 2014 compared with the corresponding period last year, higher car sales prices, reduced credit availability and import constraints in Argentina – Brazil’s major export destination.
“Several carmakers [cut] output during the period,” he said.
For the second half of 2014, however, Brazil’s automotive activity is expected to increase, as a consequence of more working days and seasonal factors, Moan said.
Car output is expected to amount to 1.77 million units from August to December, up by 13.2% compared with the first half of the year.
Local sales and exports are also predicted to respectively increase by 14.3% and 36.9%, to 1.9 million units and 232,000 vehicles.
Brazil’s car output came to 215,900 units in June, down 33.3% year-on-year, Anfavea figures show.
Car sales to the local market fell by 17.3% in the same comparison, to 262,600 vehicles, while exports dropped by 51.1%, to 24,199 units.
Steel components make up about 55.7% of a vehicle's weight and represent around 7.9% of its sales value, according to Brazil's steel institute, IABr.
Brazil's auto association Anfavea has revised downwards its forecast for the Brazilian car industry in 2014 on a poor performance in the first half of the year.