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Brazilian Auto Sales Grew 29% Y-o-Y in March
Apr 12, 2010

Backed by the government incentives and support packages, the Brazilian automobile industry is shining, and with expected heavy incentives from major players, it will continue to dazzle in future also.

According to FENABRAVE, or National Automobile Dealership Association, auto sales in Brazil this March grew 29% year-on-year, as per the news published by NASDAQ.

In March 2010, the sales of cars and light vehicles summed 337,381 Units, up 59.6% month-on-month. After including the sales of buses and trucks in the figures, March sales summed up 253,734 Units, up 30.3% year-on-year.

Tax incentives granted by the Brazilian government is the chief reason for the surge in auto sales. The government, in early 2009, unfolded a longed-for package to support the automobile sector. It has reduced the tax for purchasing cars under its plan. There has been a 7% decline in the tax imposed on popular cars-up to 1000 cc engines. Furthermore, for cars with 1001cc to 2000cc engines, new tax rate was fixed at only 6.5%, whereas, a tax rate of 5.5% was imposed on ethanol alone and flex fuel engines.

Tax rates on commercial segments have also been slashed by the Brazilian government, which ultimately led to highest sales of cars so far, particularly LCVs and Passenger cars, reported by automobile industry in June 2009.

The augment in car sales is also because of a flourishing economy. The Brazilian economy continued with its vigorous recovery as the industrial and services sectors of the country responded to intense domestic demand. The consumers confidence was hence increased which persuaded them to purchase vehicles.

Auto industry of the country is expected to grow more this year. According to market research report titled “Brazil Automobile Forecast to 2013”, by RNCOS, in 2013, the automobile industry of Brazil will sell an anticipated 3.8 Million Units of cars. Also, by 2013, light vehicles sales will touch 0.66 Million Units.

According to a Research Analyst at RNCOS, “Brazilian automobile industry looks dazzling. In the years to come, various players including Volkswagen, GM, and Ford, have plans to invest profoundly in Brazil. Volkswagen, in particular, will be spending $3.4 Billion in total in manufacturing capacity expansion along with new products by 2014. Coupled with rising middle class families with increasing disposable income in Brazil, these investments will lead the Brazilian auto industry to a new track.”

Related Market Research Reports:
China Automobile Sector Forecast to 2012
Hybrid Car Market Forecast to 2012
Indian Automobile Sector Analysis