São Paulo – The automobile industry results announced this Wednesday (7th) by the National Association of Vehicle Manufacturers (Anfavea) forecast that the domestic market should grow by 4% to 5% in 2012, as against the 3.63 million vehicles expected to be sold by the end of 2011.
In turn, exports, which grew by 4.7% from January to November this year, are expected to decline in 2012. According to the Anfavea president, Cledorvino Belini, the raised Tax on Industrialized Goods (IPI) on imported cars is likely to boost demand for domestic product.
Belini stated that the increase in exports this year was prompted by Latin American countries’ imports, in particular Argentina, whose market is hot right now. The same, however, should not hold true in 2012. “Auto exports should drop from 540,000 [the forecast for 2011] to 510,000, i.e. roughly 5.5%. The IPI may cause a shift in the [sales] mix. National product should account for most of this [sales] ‘pie’. A larger share of production is likely to remain in the domestic market,” said Belini.
To the Anfavea president, even with the crisis in Europe, Brazilian sales may grow in 2012. This is so thanks to the domestic consumption potential and government policies. “The government is trying to make the domestic market stronger. We have declining interest rates, a population bonus and we might exit this crisis strong. Still, we are liable to be affected by it,” he said.
Up until November, the industry exported 493,162 automobiles, light commercial vehicles, trucks and buses. Export revenues reached US$ 14.2 billion from January to November, 19.9% more than in 2010. From January to November this year, 2.251 million new domestic automobiles were licensed, 1.4% less than in the same period of 2010. On the other hand, the number of imported vehicles licensed increased by 32.3%: from January to November, 2010, 577,000 new imported cars were licensed in the country. This year, 764,000 imported cars were licensed.
Agricultural machinery
The domestic market for automobiles, light commercial vehicles, buses and trucks is expected to grow in 2011 and also in 2012. This, however, is not expected in the agricultural machinery industry. From January to November 2011, 61,670 units were sold – 4.6% less than the 64,645 units sold in the same period of 2010. The forecast is that the export volume should remain stable at 18,200 units, but revenues should decline by 3%. Anfavea does not expect an increase in domestic sales.
The Anfavea agricultural machinery director, Milton Rego, claimed that the decline in sales is caused by the “depletion” of the Agrarian Development Ministry’s Mais Alimentos (More Food) program. The program offers financing lines at low interest rates to foster family farming. It was first implemented in the South of the country and, according to Rego, it helped boost agricultural machinery sales in the last two years. Now, he says, the program must reach other regions of the country, such as the Northeast.
Rego acknowledged that exports are going down, especially to Africa, because the country is losing competitiveness in the sector. The Europeans are among the main competitors. “There is no question that we are competitive in Africa due to our similarity with their local [weather and crop] characteristics. The issue is the ‘Brazil cost’ [i.e. the cost of doing business in the country]. The issue is the ports, the taxes and logistics that crop up as the real [Brazilian currency] appreciates,” he said.
According to Rego, the More Food Africa program, launched in October, may boost exports in 2012. However, he said the financial conditions are yet to be set.
*Translated by Gabriel Pomerancblum
