SAO PAULO, July 2 Brazilian auto dealers slashed
this year's sales forecasts on Wednesday despite extended tax
breaks for the industry, which is struggling with tighter credit
and plunging consumer confidence.
National dealership association Fenabrave cut its estimate
for passenger vehicles to a 7.8 percent drop in 2014, down from
an earlier forecast for a 3.5 percent decline. Fenabrave now
sees heavy truck sales plunging 14.1 percent this year, compared
with an earlier outlook for 1.6 percent growth.
The new forecasts came alongside registration data showing a
10.2 percent drop in Brazilian car, truck and bus sales in June
from May and a 17.3 percent plunge from June 2013, as the start
of the World Cup piled on to the industry's slump.
Fenabrave's dire outlook came just two days after the
government decision to extend an expiring industrial tax
incentive through the end of the year, prolonging a lifeline for
the auto industry, which accounts for a fifth of Brazilian
Brazil is the world's fourth-largest auto market and a major
base of operations for the world's biggest automakers, including
Italy's Fiat SpA, Germany's Volkswagen AG
and U.S.-based General Motors Co and Ford Motor Co.
(Reporting by Alberto Alerigi Jr.; Writing by Brad Haynes;
editing by Matthew Lewis)