MercoPress. South Atlantic News Agency

Auto production and sales in Brazil surge as confidence returns

Buyers have flocked to showrooms attracted by tax breaks

Automobile output in Brazil climbed in June for the second straight month as manufacturers stepped up production to meet growing consumer demand, the national automakers' association Anfavea said on Monday.

Production rose 8.4% to 283,900 units in June from the previous month, Anfavea said in a press release distributed in Sao Paulo. But on a year-on-year basis, output slumped 8.2% last month.

Sales also surged 21.5% in June to a record 300,002 units from the previous month, and 17.2% from June 2008, the group said.

A combination of tax breaks, lower prices and improved confidence has sent consumers flocking to showrooms, industry executives said last week. The June data underscore the success of President Lula da Silva's tax breaks on vehicles and home appliances to revive industrial production and pull the economy out of recession.

Fiat remained the market leader in June, selling 70,645 cars and small trucks, a 16.5% increase over May. Volkswagen sold 66,849 units last month, up 20%; GM's sales surged 22.5%, totalling 58.634 units and Ford, the fourth-ranked automaker in Brazil, completed sales of 58,634 units, up 32%.

Brazil's national dealers' association, known as Fenabrave, had already said last week that sales had jumped to a record high in June, helped by improving consumer confidence and government tax breaks.