Brazil auto sales rise in Dec, hit record in 2007

SAO PAULO, Jan 7 (Reuters) - Brazil ended 2007 with record vehicle output and sales, which soared nearly 28 percent from a year earlier on the coattails of faster economic growth, the national automobile association Anfavea said on Monday.

Output rose 13.9 percent last year to 2.97 million units, and vehicle sales, including imported automobiles, hit 2.46 million, all in line with previous Anfavea forecasts.

Sales of locally-made vehicles rose about 23 percent to nearly 2.2 million units in 2007, including 2 million flex-fuel vehicles, which run on any blend of gasoline and ethanol made from sugar cane.

The share of flex-fuel vehicles to account for 86 percent of all new sales last year, up from 78 percent in 2006.

In December, sales of new domestically-produced motor vehicles edged up 0.6 percent to 209,200 units, jumping almost 14 percent from the same month a year earlier. Taking into account imported cars, sales rose 2.2 percent from the previous month to 242,200 units.

At the same time, output slumped 17.7 percent from the previous month to 223,200 vehicles as the holiday season kicked in, but was 17.8 percent higher than a year earlier.

Anfavea has said it expects new automobile sales in Brazil to surge more than 17 percent to 2.88 million units in 2008, helped by a decline in domestic borrowing costs.

Output is forecast to rise to 3.24 million vehicles this year, fueled by a rise in domestic demand.

Brazil's Trade and Industry Ministry expects automakers to spend $15 billion over the next three years to expand production capacity to 5 million vehicles a year from around 3.5 million.