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Brazilian Auto Industry Remains Buoyant in March
May 04, 2010

Brazil’s automobile production increased in March on the back of record sales pushed by tax breaks which were due to end in March.

As per the statement released by the national automakers’ association, Anfavea, Brazil’s automobile production increased in March 2010, reported Reuters. 331,000 new cars and trucks were manufactured during March 2010, representing an increase of 32.5% over the preceding month and an increase of 20.3% from March 2009.

Automobile sales recorded even higher growth during the month, with new car and truck sales increasing 60.1% from February 2010 and 30.3% from March 2009, attaining a record monthly high of 353,700 Units.

For March 2010, Fiat dominated the market by selling 73,545 Units, an increase of 51% over the preceding month. With sales of 70,037 Units (up 65.5% from February 2010), GM followed Fiat. Sales of Volkswagen increased 63.1% to 69,711 Units, whereas that of Ford rose 55.1% to 36,303 Units.

The March growth in Brazil’s auto industry is attributed to the increase in production by automakers in wake of record sales. The increased sales during the month were because of tax breaks on cars. The government of Brazil sanctioned tax cuts in December 2009 considering the gloomy projection for gross domestic product amid economic recession. As the tax break was due to exhaust by the end of March, consumers rushed to buy cars.

Brazil’s passenger car segment is anticipated to continue registering lucrative sales in coming years also. The country’s automobile industry is expected to hit sales of 2.7 Million cars in 2010, and CAGR of passenger car sales will continue to be in double digits during 2010-2013, predicts industry research report “Brazil Automobile Forecast to 2013” from RNCOS.

The positive forecast for the industry is well supported by the reduction in banks’ interest rates and easy loan terms. Easy credit accessibility helped the potential buyers’ pool in Brazil to expand by over 50%. Also, as the country is now experiencing strong economic growth, the tax breaks were decided not to be renewed.

According to a Research Analyst at RNCOS, “Having acknowledged the true market potential, both the domestic and foreign automakers are making heavy investments in the Brazilian auto industry. As a result, competition in the market will increase, which will ultimately lead to reduced prices and improved quality of automobiles.”

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