Brazil’s car output drops 22% in August; sales down 17%

Car output in Brazil fell by 22.4% year-on-year in August, according to figures published by the country’s automotive association, Anfavea, on Thursday September 4.

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Vehicle production came to 265,900 units, against 342,800 cars a year earlier.

This decline reflected reduced demand in both the domestic Brazilian and export markets, as well as high inventory levels handled by carmakers, according to the group.

The August output increased by 5.3% from July’s level of 252,600 vehicles, however, as the sector’s performance in July was affected by fewer working days when the country hosted the finals of the football World Cup.

Car sales to the Brazilian domestic market were also lower than expected.

Sales totalled 272,500 units in August, down by 17.2% year-on-year and by 7.6% month-on-month.

“Recent developments and discussion in the political arena led to a troubled [business] environment, with effects on consumers’ and entrepreneurs’ confidence and, consequently, the reduced movement in car sales,” Anfavea predident Luiz Moan said.

He was referring to the death of presidential candidate Eduardo Campos in mid-August, which affected the polls ahead of Brazil’s presidential election.

“In addition, measures [introduced by the government] to increase liquidity in the market began to take effect only last week,” Moan said.

Meanwhile, Brazilian vehicle exports declined by 50.6% in August compared with the same month last year, to 31,651 units.

On a monthly basis, exports fell by 7.5%, from 34,235 vehicles, according to Anfavea.

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.