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In Brazil, Industrial Output, Car Sales and Installment Payment on Time Are All Down

Brazil appliances In São Paulo, Brazil, the number of people who have fallen behind in making installment payments rose to 21.8% in April, up from 18.5% in March. The São Paulo Commercial Federation (Fecomercio-SP) has released monthly reports on payment defaults since February 2004, and Della Rosa, an economist at Fecomercio-SP, says that although the April numbers are high, they are not necessarily a reason for concern.

She says more data is needed to constitute a clear tendency.

As for the April numbers, Rosa says several factors contributed to that.  Higher unemployment was one of the reasons. The government statistical bureau (IBGE) found that the jobless rate rose from 5.7% in February to 6.2% in March.

She also mentioned holiday season spending, that is, overspending, as another probable reason for payment defaults.

Fecomercio-SP data shows that over 76% of São Paulo consumers use credit cards for purchases, around 20% use loans (personal credit) and 15% use payment coupon books.

Fecomercio points out that one of the areas where payment delinquency has risen is in automobiles where the payment default rate is running at around 5.5%, the highest since the Central Bank began tracking in 2000.

Della Rosa says that the percentage of Paulistanos (São Paulo city residents) with debts was just over 50%, which is not too high.

“If the number of people with debts was much higher that would be cause for concern. As it is, there is still room for more consumption. So much so, that expectations for Mother’s Day sales this year remain very strong.”

As for industrial production it fell once again in March by 0.5% compared to February. This was the seventh consecutive monthly decrease in the industrial sector. There is now a cumulative drop of 3% in industrial production for the year.

Compared to March 2011, output in March 2012 was down 2.1%.

According to the IBGE, industrial sector output in March was down in 18 out of the 27 segments it surveyed.

One of the nine segments where there was growth was automobiles, which is heavily weighted in the survey. It was up 11.5% in March, and cumulatively up 26.2% in February and March, but had fallen 31.2% in January.

Automobile segment production in March 2012, when compared with March 2011, was down 7.5%.

Sales of vehicles in April were down 9.5%, compared to the same period last year. According to the Auto Dealers Association (Fenabrave), a total of 406,496 vehicles were licensed in April. That was down 15.96%, compared to March 2011.

Fenabrave says it has now revised its forecast of the vehicle sale increase for this year to 3.4%, down from 5.76% at the beginning of the year.

Automobile sales in April 2012 had their worst performance since April 2009, with a drop of 10.84% in sales, compared to April 2011.

The only vehicle segment were there was an increase in sales was in farm machinery, up 4.84% (April 2012 to April 2011 comparison).

The biggest drop was in sales of buses, down 21.47%.

The Brazilian automobile and light-duty truck segment is dominated by Fiat, with 21.8% of the market, and Volkswagen, with 20.8%.

ABr

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  • Show Comments (2)

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