Brazil’s auto output recovering, but still down 22% year on year in August

Vehicle output recovered month-on-month in Brazil during August, but was still down by 21.8% in comparison with the same month in 2019, the national automakers association, Anfavea, said on Friday September 4.

The country produced 210,860 vehicles in August, compared with 269,758 units in August 2019.

Production, however, was up by 23.6% compared with July’s 170,651 units.

Output figures reached a nine-month high in August, with manufacturers continuing to slowly ramp up production after the widespread shutdowns in March-April because of the Covid-19 pandemic. Anfavea said the year-on-year decline was due to social distancing and health and safety measures.

New vehicle registrations were likewise lower on an annual comparison, according to the association. National new vehicle sales reached 165,524 units in August, down by 23.7% from 216,858 units in August 2019.

At the same time, exports totaled 28,126 units last month, a 23.4% year-on-year decrease from 36,717 units in August 2019 - the lowest volumes since December 2019.

“Brazil felt a significant impact from weakening activity in Latin America [during the Covid-19 pandemic] - the region it mostly exports to,” Anfavea president Luiz Carlos Moraes said on Friday.

Brazilian steelmakers supply the automotive industry under annual contracts and in 2020, they raised prices for those contracts by 5%, and then further increased it for distributors and selective industrial clients on four occasions.

Fastmarkets’ latest price assessment for steel hot-dipped galvanized coil domestic monthly, exw Brazil, was 3,590-3,660 Reais ($675-688) per tonne on August 14, up from 3,350-3,420 Reais per tonne a month before and at the highest level in 2020.

On average, about 900kg of steel is used in every car, according to the World Steel Association (Worldsteel).

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