Brazil’s domestic car sales hit record in 2012

Car sales to the Brazilian domestic market hit a record high of 3.8 million units in 2012, up by 4.6% year-on-year, the country’s car industry association, Anfavea, said on Monday January 7.

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Sales were stimulated by a cut in the IPI tax on local vehicle sales introduced by the government in May, as well as increased credit availability, the trade group said.

Car output, however, declined by 1.9% year-on-year in 2012, to 3.34 million vehicles.

This decrease – the first in ten years – was due to reduced export levels, a weak performance by the truck segment and an inventory adjustment experienced by the industry in the first half of the year, Anfavea said.

In December alone, Brazilian car sales increased by 3.1% compared with the corresponding month in 2011, to 359,400 units, while car production was stable at 259,400 vehicles.

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.