SAO PAULO Feb 6 Motor vehicle sales in Brazil
fell in January, a month after consumers flocked to dealerships
in the world's fourth largest car market to take advantage of
holiday discounts and expiring tax breaks.
Automobile sales dropped 11.7 percent in
January from December after having risen 16.8 percent in the
previous month, according to data from industry group Anfavea on
President Dilma Rousseff's government cut taxes on
automobiles in 2012 in an effort to boost manufacturing, spur
consumption and protect jobs. Many local car-buyers were
concerned that the taxes would be fully re-instated at the start
of the year, leading to December's soaring sales numbers.
Brazil's finance ministry eased those fears only late in
December, saying that the tax would be re-introduced gradually.
While the stimulus supported the car industry when they were
first rolled out, economists have warned that the temporary
measures only affected the timing of purchases rather than
underlying demand. Dealers expect sales to stagnate or fall
again this year as the taxes are restored.
Sales growth is seen slowing to just 3 percent per year over
the next decade, down from the double-digit bonanza of the past
ten years, according to economists advising an association of
Brazilian car dealers.
Auto production rose 2.9 percent in January from February,
as factories returned from year-end holidays. Output had fallen
18.6 percent in the previous month.
Brazil is a key market for the world's biggest automakers,
including Italy's Fiat SpA, Germany's Volkswagen AG
and U.S.-based General Motors Co and Ford
Fiat remained Brazil's top seller of cars and light trucks
in January, with 63,049 new registrations. VW held second place
ahead of GM, selling some 56,133 passenger vehicles compared
with the U.S. automaker's roughly 53,892 cars and light trucks.
Altogether, automakers in Brazil produced some 237,500 new
cars and trucks last month, while sales totaled about 312,600
vehicles, Anfavea said.