December 6, 2018 / 3:01 PM / 6 months ago

UPDATE 1-Brazil auto industry is optimistic for 2019, despite November slump

(Recasts with outlook for 2019)

SAO PAULO, Dec 6 (Reuters) - Brazil auto production and sales fell in November, but industry representatives said on Thursday they are optimistic that 2019 will be a year of growth, thanks to a new incentive plan and expectations about the incoming government.

Automobile production in Brazil fell by 6.9 percent in November from the previous month, while sales dropped by 9.3 percent. Automakers in Brazil produced around 245,100 new cars and trucks last month, while sales totaled about 230,900 vehicles.

Antonio Megale, president of industry association Anfavea, told reporters that the slump was due to November having fewer business days than October.

Compared with a year ago, auto output fell by 1.6 percent while sales grew by 13.1 percent.

So far in 2018, auto sales and production have seen double-digit growth and the industry expects similar growth to continue through 2019, although he did not provide specific numbers.

“The country has everything it needs to grow, so we are optimistic for next year,” Megale said. Far-right President-elect Jair Bolsonaro will take office next year and has strongly signaled he will implement market-friendly reforms.

But where the sector has suffered recently is with exports to neighboring Argentina, its main trade partner. Exports to Argentina fell by 11.3 percent compared with October and 53 percent compared with a year earlier.

“One day, God willing, both Brazil and Argentina are going do well at the same time,” Megale said, adding that they expect exports to rebound in the second half of 2019.

Megale also talked about electric vehicles, which have drawn billions of dollars in investments by automakers in Europe, the United States and China. But he said Brazil was not ready to start producing them and that the market is still small, with fewer than 4,000 electric vehicles sold in 2017 and so far in 2018.

Brazil was one of the world’s five biggest auto markets until a recent downturn and remains a major base of operations for Fiat Chrysler Automobiles NV, Volkswagen AG , General Motors Co and Ford Motor Co. (Reporting by Marcelo Rochabrun and Alberto Alerigi Jr.; editing by Jonathan Oatis)

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