MercoPress. South Atlantic News Agency
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Brazil car production slips but export forecast rises as world demand picks up
“The performance of our exports reflects an improvement overseas, not that we are more competitive” said Anfavea Luiz Yabiku Jr. Car production in Brazil slipped in July to the lowest daily rate in five months as factories, facing sagging consumer confidence scaled back output industry data showed on Tuesday.
Anfavea, the national automakers association, said automobile production in Brazil fell 2.7% from June, even though July had three additional work days. Factories produced about 13,600 cars a day, the lowest rate since February.
Exports rose 2.4% from June, Anfavea said. It revised its 2013 export growth forecast to 20%, up from a prior estimate for a 4.6% decline.
Brazil's currency, the Real, has steadily weakened over 10% so far this year as global investors lose confidence in a recovery in Latin America's largest economy. While the drop has made Brazilian exports cheaper, the recent improvement in car exports was mainly due to the better health of other economies.
“The performance of our exports reflects an improvement overseas, not that we are more competitive by ourselves,” said Anfavea President Luiz Yabiku Jr.
Disappointing economic growth, fading consumer confidence and rising borrowing costs are dampening demand for cars in Brazil.
Sales rose 7.4% in July from June but dealerships sold less than 15,000 vehicles per day in July for the first time since March. The daily production rate had outpaced sales for four months, driving up inventories.
Still, the industry expects to set a new annual sales record after President Dilma Rousseff extended tax breaks on locally made cars through the end of the year. Yabiku Jr. said he was confident sales and output would continue to grow next year, even if the tax breaks are not extended further.
Automakers produced 312,300 cars and trucks in July, while sales totalled 342,300 vehicles, according to data released by Anfavea. Auto output had slumped 8% while sales rose 1% in the previous month.
Top Comments
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Read all commentsDoes “locally-made cars” mean Brazilian only?
Aug 07th, 2013 - 06:12 am 0Its not just sales, its also supply.
Aug 07th, 2013 - 07:54 am 0I strongly suspect that the autoparts that Brasil contacts to come from Argentina are necessary to complete the cars. You know, those held up in the border trade dispute.
... Reduced car sales in Brasil; reduced export of Brasilan-made cars to South America and beyond.
Argentina is responsible for much disruption well beyond its borders.
A South America pulling together and trading *effectively* with with the world *with accelerating integration* would help all South American countries, companies and people.
I was brought up with the phrase “You are your own worst enemy” .. a phrase which applies across much of the Continent of South America.
Brazil cannot seem to answer the question of what are they trying to do with the economy?
Aug 07th, 2013 - 01:54 pm 0““The performance of our exports reflects an improvement overseas, not that we are more competitive by ourselves,”” is a damning statement about how uncompetitive the auto manufacturing is despite the 10% devaluation in the currency.
But what can be expected when manufacturers are shielded from the real world by the protectionist stance of this government?
And yes, The Dark Country is creating serious problems for many countries but it seems nothing of any substance to combat it is being done. A ‘cat’ fight between the two presidents is hardly confidence building when what is required are real punitive measures against this sort of nonsense, but that would hardly fit in with unification of SA would it?
I still cannot see how extending the tax breaks for locally produced cars does anything but increase the trade gap when so much content has to be imported to construct them and there is no or only little increase in exports.
Tail chasing the dog?
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