Brazilian car sales slow in February as tax breaks fade-source

SAO PAULO, March 1 Fri Mar 1, 2013 9:38am EST

SAO PAULO, March 1 (Reuters) - Brazilian car sales slowed in February to their weakest pace in nearly a year, according to a source with access to market data, as holidays and the gradual removal of tax breaks sapped demand.

Sales of cars and light trucks fell 6 percent from a year earlier to about 222,800 vehicles in Brazil, the world's fourth-largest auto market, the source said. Sales dropped 25 percent from January, which had nearly an extra week of working days due in part to the Carnival holiday in February.

Dealership association Fenabrave generally reports industry sales data in the first week of each month.

The government is also gradually withdrawing emergency tax cuts for the auto industry meant to spur demand in a sector that makes up more than one-fifth of the country's industrial output and 5 percent of its economy.

Some economists have warned the measures would lift short-term demand at the cost of sales when the stimulus expires.

About 70 percent of Brazil's sales going to Italy's Fiat SpA , Germany's Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article