Reuters/Sao Paulo
The pace of vehicle production in Brazil slipped in July to the lowest daily rate in five months as factories, facing sagging consumer confidence, scaled back output, industry data showed yesterday.
Anfavea, the national automakers association, said automobile production in Brazil fell 2.7% from June, even though July had three additional work days.
Factories produced about 13,600 cars a day, the lowest rate since February.
Exports rose 2.4% from June, Anfavea said. It revised its 2013 export growth forecast to 20%, up from a prior estimate for a 4.6% decline.
Brazil’s currency, the real, has weakened over 10% so far this year as global investors lose confidence in a sustained recovery in Latin America’s largest economy. While the drop has made Brazilian exports cheaper, the recent improvement in car exports was mainly due to the better health of other economies.
“The performance of our exports reflects an improvement overseas, not that we are more competitive by ourselves,” said Anfavea president Luiz Yabiku Jr.
Disappointing economic growth, fading consumer confidence and rising borrowing costs are dampening demand for cars in Brazil. Sales rose 7.4% in July from June but dealerships sold less than 15,000 vehicles per day in July for the first time since March.
The daily production rate had outpaced sales for four months, driving up inventories. Still, the industry expects to set a new annual sales record after President Dilma Rousseff extended tax breaks on locally made cars through the end of the year.
Yabiku Jr. said he was confident sales and output would continue to grow next year, even if the tax breaks are not extended further. Automakers produced 312,300 cars and trucks in July, while sales totaled 342,300 vehicles, according to data released by Anfavea.