Brazil motor vehicle sales hit record levels in 2009 as government tax breaks and resilient consumer confidence allowed the multinational car makers to overcome sluggish economic conditions.
According to the Brazilian Motor Vehicle Manufacturers Association, or Anfavea, car makers sold 3.14 million vehicles in 2009, representing a jump of 11.4% from the year before and marking a third consecutive yearly record.
"This was the best year in our history, despite the economic slowdown," Jackson Schneider, Anfavea's president, told journalists Thursday. "Declining interest rates and tax breaks helped us greatly."
In a tough global market, Brazil's robust performance has been a ray of light for the big four localauto companies, Fiat SpA, Volkswagen AG, General Motors Co. and Ford Motor Co.
Much of the success is due to a government tax break that took as much as 7% off the sticker price of new cars. Meanwhile, consumer confidence remained high and the public chose to take advantage of declining interest rates to buy cars despite the slowness of the wider economy.
Car production actually fell 1% last year to 3.18 million units due to a decline in exports.
Foreign sales slumped 40.5% to $8.3 billion last year amid the wider global economic malaise.
According to Schneider, export demand is now slowly recovering but shipments remain far below pre-crisis levels.
Volkswagen led the Brazilian market in 2009 with sales of 627,915 cars, which was 19.1% higher than the year before. Fiat came in second with sales of 619,017 and more-modest growth of 11.0%. General Motors saw sales rise 7.2% to 502,320 last year, while Ford registered 22.7% growth in sales to 235,063.
December saw particularly robust sales as Brazil's economic recovery gained pace. Some 293,026 units were sold last month, up 16.4% from November.
Production, however, dropped 13.6% from November to 251,482 units. December exports were 1.9% higher than in November at $900.2 million.
Anfavea expects even stronger sales in 2010 as the economy accelerates; economists predict growth of at least 5% this year. Vehicle sales are seen reaching 3.4 millions.
For 2010, the biggest challenge will be to reestablish growth in export markets, said Schneider.
"We will have to fight to get back our pre-crisis market share because of difficult market conditions and the strength of the Brazilian real," said the executive.
The strength of the real, which rose 34% against the dollar in 2009, will also mean increased competition from imports, which currently account for only a small portion of the domestic market.
(Source: irco.biz)
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