December 4, 2009 / 1:37 PM / 8 years ago

UPDATE 2-Brazil car sales forecast to rise 9.3 pct in 2010

* Brazil car sales, output, export revenue seen up in 2010

* Brazil auto production falls 8 pct in Nov from Oct

* Sales down 14.5 percent from Oct, up 41.5 pct on year

(Recasts with car sales forecast for 2010)

By Rodolfo Barbosa

SAO PAULO, Dec 4 (Reuters) - Car manufacturing in Brazil will climb in 2010, along with sales and export revenue, the national automakers’ association Anfavea said on Friday, with expectations for strong economic growth set to stoke domestic demand.

Brazilian automobile production in 2010 could grow 5.4 percent, the group said on Friday, with sales to jump 9.3 percent.

The group forecast a 12.2 percent jump in revenue next year from auto exports.

Automakers have shown themselves keen on Brazil, which saw a global economic crisis wreak far less havoc than in hard-hit developed economies. The Brazilian recession lasted only six months, with the country returning to growth in the second quarter of 2009.

Last month Ford Motor (F.N) unveiled plans to invest 4 billion reais ($2.34 billion) to expand its operations in Brazil. Most of the money will be plowed into its Camacari plant in the northeast to raise output to 300,000 cars a year. [ID:nN20232626]

Volkswagen (VOWG.DE), Europe’s largest carmaker, followed soon after, announcing it would pour up to 6.2 billion reais ($3.63 billion) in Brazil from 2010 through 2014 in a bid to become the country’s biggest carmaker. [ID:nN26254594]

November output in Brazil fell 8 percent compared to October, Anfavea said, as government tax breaks on some categories of cars were phased out.

Output fell to 292,100 units in November, Anfavea said, but the number surged 48 percent from November 2008 when the credit crisis was ravaging economies around the globe.

Brazil’s national dealers’ association, Fenabrave, said earlier this week that sales had tumbled 14.5 percent month-on-month to November to 251,720 units, figures that Anfavea confirmed. That was 41.5 percent more than a year ago.

    Brazil, Latin America’s largest economy, is a major market for Italy’s Fiat FIA.MI, Germany’s Volkswagen AG, U.S.-based General Motors [GM.UL] and Ford Motor Co (F.N). The country produces close to 3 million cars per year.

    Fiat remained the market leader in November, selling 60,227 new cars and trucks, down 11.4 percent from October, while Volkswagen sales fell 10.1 percent to 53,288 units.

    GM’s sales tumbled 13.9 percent to 47,643 units, while Ford sold 21,297 units, 24.1 percent lower than in October.

    Last month the government extended tax breaks for 1-liter flex-fuel engined cars until the end of March 2010. Almost all new cars sold in Brazil have flex-fuel engines which enables them to run solely on ethanol biofuel, gasoline or any mixture of both.

    Taxes on new cars were scrapped on 1-liter cars earlier this year and reduced for larger-engined cars to stoke sales as the credit crisis bit. The tax cuts for the larger cars will be phased out completely by the end of the year.

    ($1=1.707 reais)

    (Additional reporting by Peter Murphy; Writing by Peter Murphy and Luciana Lopez, editing by Dave Zimmerman); Reuters Messaging:; Tel: +5511-5644-7756

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