BRASILIA: A total of 893,752 new motor vehicles were sold in Brazil in the January-April period, a figure that was down 19.9 percent from the first four months of 2014, the National Motor Vehicle Dealers Federation, or Fenabrave, said.
The sharp drop in sales forced Fenabrave to lower its projections for 2015, with the trade group now estimating that some 2.38 million vehicles will be sold, an 18.93 percent drop from 2014.
Motor vehicle sales in Brazil have been decreasing since the government ended a tax incentive program implemented to revive the sector.
Brazil’s economy, which grew a mere 0.10 percent last year, might contract 1 percent this year, the latest estimates show.
Higher interest rates are already hurting auto sales.
“We are encountering more headwinds than expected and what we did expect is turning out to be even worse,” Fenabrave president Alarico Assumpcao said. “We believed the economy might stabilize or even show slight growth.”
Assumpcao said he supported the austerity package proposed by President Dilma Rousseff’s administration to balance the budget.
“It is a bitter remedy, but it is necessary to look forward to a more positive landscape in the second quarter,” Assumpcao said in a press conference.
On Monday, Volkswagen furloughed 8,000 of the 13,000 workers at its Sao Bernardo do Campo plant, the German company’s largest factory in Brazil.
The move was made to “match the volume of production with the market’s demand,” Volkswagen said in a statement, adding that the 8,000 workers would return to work in 10 days, when the factory gears up for operations again.
