Brazil Vehicle Sales Set 1-Month Record in August

SAO PAULO – Brazil’s auto industry achieves its best-ever 1-month performance in August with 420,101 deliveries, up 15.3% over July (264,201 units) and 28.3% better than August 2011 (327,360).

The national association of auto dealers, Fenabrave, says the market also set a record with 405,518 units licensed last month, a 15.4% improvement over July, thanks to a discount on the country’s industrial product tax.

Fenabrave says last month’s sales, which bested the previous record of 361,197 units in December 2010, largely resulted from the government’s threat to end the IPI. The government now says the discount, designed to stimulate investment by the industrial sector including auto makers and parts manufacturers, will continue through October.

“It was a surprising month,” Fenabrave President Flavio Meneghetti says. “When consumers are not burdened with (heavy) taxes, the market reacts positively.

“Obviously many people decided to purchase their cars last month rather than wait, but we cannot quantify this segment as yet. Even so, those who purchased a vehicle three years ago or more are now beginning to change cars.”

The market also was helped by more available credit. “Previously only 30% of the buyers were given credit,” Meneghetti says. “Now the average varies between 50% and 60%, but 60-month term payments no longer exist.”

Truck sales rose 5.9% in August to 11,360 units, as truckers and fleet owners surprised Fenabrave officials by purchasing their vehicles in advance. “This was unusual, especially because gross domestic product growth was lower than in the past,” Meneghetti says.

In the first eight months of 2012, total vehicle sales gained 5.5% year-over-year to 2.5 million units.

Cars, vans and pickup sales alone climbed 7.0% over like-2011, thanks largely to the federal government tax stimulus and improved credit availability, despite high levels of payments in arrears and nonperforming loans.

The Volkswagen Gol was Brazil’s best-selling car in August with 32,633 units, ahead of the Fiat Uno/Mille with 30,373. In the years’s first eight months, Gol sales totaled 188,592 compared with 177,349 Unos. The Fiat Palio was third with 117,100 deliveries.