SAO PAULO: Brazilian auto sales amounted to 1.31 million units between January and June, down 20.7 percent from the same period of last year and the lowest first-half total since 2007, the National Federation of Motor Vehicle Dealers, or Fenabrave, said.
Auto sales in June, including cars, SUVs, trucks and buses but not motorcycles or agricultural machinery, totaled 212,535 units, down 19.4 percent from the same month of 2014.
The plunge has prompted Fenabrave to lower its sales projections for this year to 2.62 million units, which would be a 23.9 percent decline from 2014.
The automotive sector has been reeling due to an end to government tax breaks for new vehicle purchases, part of an austerity program enacted after federal, state and local governments ended 2014 with a cumulative primary budget deficit – before interest payments – equivalent to around $12.5 billion.
Until last year, Brazil’s public finances had not been in the red since the current reporting methodology was adopted in 2001.
Automakers also have been hit by high interest rates – the benchmark Selic rate is at its highest level in more than six years – aimed at curbing inflation, which is at an 11-year high.
As part of an effort to adjust production to declining demand, automakers have reduced payrolls through early retirement and layoffs and placed workers on paid furloughs.
