Brazil car sales fall 9 percent in November as economy drags

Mon Dec 3, 2012 6:00pm EST

* Continued tax breaks fail to sustain October rebound

* November sales 11 pct lower than November 2011

RIO DE JANEIRO Dec 3 (Reuters) - Brazilian auto sales fell 9 percent in November as continued tax breaks failed to sustain an October rebound in Latin America's largest vehicle market.

The country's association of car dealers, known as Fenabrave, said a total of 451,613 cars, light commercial vehicles, buses and trucks were registered during the month, compared with 496,568 a month earlier.

The November figure represents a nearly 11 percent fall in sales from November 2011 and a cumulative 11-month drop of 1.5 percent from the comparable period a year earlier.

The car industry, accounting for more than a fifth of the Brazil's manufacturing output, is struggling with high costs and sluggish demand as the country's economy limps along after more than a year of stagnation. Last week, the government said Brazil's economy grew by just 0.6 percent in the third quarter, less than half what economists had expected.

To help spur sales, the government earlier this year introduced tax breaks on automobiles, which reduced the price of Brazilian-made vehicles by about 7 percent. Despite the stimulus, including a brief jump in sales in October, the incentives have proven insufficient for a full recovery. (Reporting by Paulo Prada; Editing by Dan Grebler)

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