Car Buyers in Brazil Finally Get Sticker Shock and Sales Fall 14%

    Fiat Punto made in Brazil

    Fiat Punto made in Brazil As consumer demand waned after four straight months of gains, Brazil's automobile sales fell 13.7% in April when compared to previous month , the national automakers' association Anfavea said on Friday, May 8.

    Sales also fell 10.3% from April 2008 to 234.400 and automobile output dropped 6.9% month-on-month in April and was down 15.8% from a year earlier to 254.700 units.

    Four months of rising car sales had fueled hopes that Latin America's biggest auto industry could already be over the worst of the global crisis, even as makers elsewhere face plunging demand.

    Sales had jumped 36.2% in March from the previous month, the fourth straight rise, and production had soared 34.2%, helped by government tax breaks that have allowed dealers to lower consumer prices.

    Brazil, Latin America's largest economy, is a major market for global automakers such as Italy's Fiat; Germany's Volkswagen; US-based General Motors Corp and Ford Motor Co. Asian and French manufacturers are also increasingly relying on Brazil to offset slumping sales at home.

    Fiat tallied the most sales in April with 58,226 units, down 9.7% from March. Volkswagen was second, with 52,821 vehicles, a fall of 17.9%.

    The national dealers' association, Fenabrave, said this week that new car, truck and bus sales in Brazil dropped 13.6% in April from March.

    Resilient consumption fueled by a tax break that cut showroom prices by about 10% percent had put the world's fifth-biggest auto market in a small group of countries whose car industries had shown glimmers of a recovery. But the export sector has been hit hard. Exports rose 5.8% in April from March but were down a hefty 45.9% from a year ago.

    Anfavea expects sales to fall this year for the first time since 2003, forecasting a decline of 3.9% to 2.71 million units. It sees output falling 11.2% to 2.86 million vehicles, the first fall since 2002.

    Mercopress

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