São Paulo – The domestic automobile market is maintaining the activity of the auto industry, thanks to the supply of credit and to fiscal stimulus, by means of the reduction in the Tax on Industrialised Products (IPI). According to the president of the National Association of Vehicle Manufacturers (Anfavea), Jackson Schneider, the scenario should persist in the near future.
He claimed that in a way, domestic sales are making up for the loss of foreign market. This year alone, the industry refrained from shipping outside the country the equivalent of US$ 4.1 billion, which represents nearly 50% of the total sold from January to July 2008, when exports totalled US$ 8.1 billion. In July, foreign sales were 3.2% lower than in June, having totalled US$ 618.2 million.
According to Schneider “there is no light at the end of the tunnel” signalling with a possibility of change in this scenario, even though the industry has already resumed hiring after eight months of dismissals in the sector. In June and July, the number of workers in the industry grew by 0.1%, having risen from 119,511 to 119,598.
“There is no question about it, our short-term bet is in the domestic market,” said the president of Anfavea. Despite a 4.9% reduction in licensing of new domestic and imported vehicles, sales in July were the third best ever in the history of the automobile industry, having totalled 285,400 units, and was only lower than the figures recorded in the previous month (300,200) and in July last year (288,100).
According to figures supplied by Anfavea, imported vehicles accounted for a 15.2% share of overall sales. More than 55% of the demand was for subcompacts with up to 1,000 cc, and the percentage of vehicles fuelled by both alcohol and gasoline, the so-called dual-fuel vehicles, remained at 89%.
To Schneider, domestic sales are boosting production, but the production level is lower than it was up until the start of the international financial crisis, presumably due to the significant reduction in exports. In July, 281,600 vehicles were manufactured, a figure 0.9% lower than in June and 11.5% lower than in the same period last year. From January to July, there was a reduction of 12.9% over the same period last year.
*Translated by Gabriel Pomerancblum
