Brazil Motor Vehicle Domestic Sales Through July Jump but Export Sales Plummet

RIO DE JANEIRO, BRAZIL – Automobile production in Brazil jumped 14.2 percent, and sales grew 9.1 percent in July from June, the best performance for the month since 2014, the National Motor Vehicle Manufacturers Association — Anfavea — said on Tuesday.

Vehicle sales climbed 12.1 percent year-to-date through July 2019 from the year-ago period, to 1.55 million units sold. Year-on-year in July, sales were up twelve percent to 243,600 vehicles. In July from June, sales were up 9.1 percent. The numbers were made public this Tuesday, August 6th, by Anfavea.

In contrast, however, the number of exported cars dropped by 42.2 percent, from 314,100 units to 181,600 units, while truck exports fell by 58.3 percent from 11,900 units to 4,900 units.

Auto exports to depressed Argentina, Brazil’s largest foreign destination for its cars, absorbing sixty percent of Brazil’s automotive exports. They are down 38.4 percent so far in 2019 compared to a year ago, Anfavea said.

“We are still witnessing a decline in exports basically due to Argentina. This month we had a minor increment in exports to Colombia and Mexico, which helped offset that decline, but we are estimating that exports could have a 29 percent drop in total numbers by the end of the year,” said Anfavea’s president Luiz Carlos Moraes.

Domestic demand for vehicles in Brazil is helping to offset a decline in export sales. However, according to research commissioned by Anfavea, it is significantly cheaper to import a vehicle from Mexico to Brazil than to make one here.

Trade rules in Brazil are changing under a liberal government that has promised to open up one of the world’s largest but most closed economies.

Automakers are figuring out what to do following an initial trade deal with the European Union, as well as changes in trade rules with Mexico, both of which could usher a flood of foreign vehicles into the country.

Anfavea’s president Luiz Carlos Moraes told reporters on Tuesday that 87.9 percent of Brazil’s auto market is fulfilled with domestically-made cars.

He said Brazil had already a lot of competition, but automakers would struggle with high and complex taxes that Anfavea is pushing to change.

Automakers in Brazil produced some 266,400 new cars and trucks last month, while new vehicle sales totaled 243,600 vehicles, according to Anfavea data.