By Rogerio Jelmayer
SÃO PAULO--New-vehicle sales in Brazil fell sharply in April, as
the country's struggling economy continued to hurt consumer
confidence, forcing the national auto dealership association to
reduce its sales forecast for this year.
Sales of cars and light vehicles, trucks and buses plummeted
25.19% in April from a year earlier to 219,350 units, the
association, Fenabrave, said on Tuesday. In the first four months
of this year, sales dropped 19.19% to 893,752 units.
The combination of weak economic activity and high inflation and
interest rates is discouraging buyers, especially with regard to
big-ticket purchases, according to economists.
With the poor sales so far this year, Fenabrave revised its
outlook for sales this year, to a decline of 18% from its previous
forecast of a drop of 10%.
Falling sales has pushed some auto makers in Brazil to lay off
employees, implement voluntary severance programs and force
mandatory vacations. Brazil's economy is expected to contract 1.18%
this year, according to economists surveyed by the central
bank.
Meanwhile, with official inflation around 8%, well above the
6.5% ceiling of the central bank's target range, the monetary
authority is expected to raise interest rates even more. The
benchmark rate, known as the Selic, is currently at 13.25%, and
economists forecast at least one more increase before the bank
stops tightening.
The largest auto makers in Brazil by sales are Fiat Chrysler
Automobiles NV, Volkswagen AG, General Motors Co., and Ford Motor
Co..
The complete figures for vehicle sales, production and exports
for April and for the first four months of the year will be
released in the next few days by auto maker association
Anfavea.
Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com
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