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Issue #583 | Forest Products

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2014 Media Kit
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Brazil auto output stagnates in April, trailing year earlier

By: | at 09:01 AM | Channel(s): International Trade  

Brazilian auto output was little changed in April from March and trailed far behind a year earlier, as weak demand and high inventories pressured global carmakers to trim their workforce.

Production edged up 1.6 percent from the month before , but fell 21.4 percent from a year earlier, national carmakers association Anfavea said on Friday.

Auto sales jumped 21.8 percent in April from March, when the Carnival holiday kept showrooms shuttered. Sales were 12.1 percent lower than April 2013.

A sluggish economy, expiring tax breaks and weak exports have put the brakes on Brazil’s car industry, triggering a wave of furloughs and adding to fear of layoffs in an election year.

President Dilma Rousseff, who is seeking re-election in October, has discussed measures with industry leaders to revive auto exports, which suffered as neighboring Argentina’s foreign reserves dwindled. Buenos Aires has slapped restrictions on imports and is renegotiating a bilateral trade pact to limit incoming Brazilian cars.

Rousseff also lacks the fiscal room for more of the heavy stimulus that kept the local car industry humming in recent years, averaging 10 percent sales growth over the past decade.

As carmakers confront excess capacity, they have begun to cut back shifts and idle assembly lines, furloughing thousands of workers over the past month.

Brazil is the world’s fourth-largest auto market and a key base of operations for automakers including Italy’s Fiat SpA , Germany’s Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co.

Fiat remained Brazil’s top seller of cars and light trucks in April, with about 60,200 new registrations. GM held second place, selling some 50,100 passenger vehicles, just ahead of VW’s roughly 47,200 cars and light trucks. Ford sold about 26,300 vehicles.

Automakers in Brazil produced 277,100 new cars, trucks and buses last month, while sales totaled 293,200 vehicles. (Reuters)