São Paulo – Vehicle exports from Brazil were up 41.7% in May from April, the National Motor Vehicle Manufacturers Association (Anfavea) reported this Monday (8th). During the month, 40,800 units were shipped abroad, up 16.5% from 35,000 units in May 2014. Year-to-date through May, exports were up 3% with 149,300 vehicles.
The Business Development manager for consulting firm Jato, Milad Kalume Neto, believes the performance in May reflects the onset of the Inovar Auto federal government program. The program was launched in 2012 and awards fiscal incentives to automakers that improve energy efficiency and vehicle safety and increase spending on engineering, industrial technology and training to suppliers. “The program is bringing more energy efficiency into the vehicles’ engines,” Neto told ANBA.
However, the specialist is cautious in celebrating the increment in exports, and notes that the basis of comparison is too weak. He says Brazilian product is not competitive at the international level, especially when it comes to entry-level vehicles. But Neto remarks that premium-type vehicle exports to South America are good, and regards production of said vehicles as a positive strategy, since there is a strong foreign demand for them. Another positive feature he names is the sale of some SUVs to Europe and the United States.
The figures concerning exports mentioned above include light-duty vehicles, trucks and buses. The best performance was verified in the first category but the other types of vehicles also had an increase in their sales abroad. The exports of light-duty vehicles increased 42.8% in May over April, trucks had a 29% increase and buses went up 25%. In the other comparisons, over May and year-to-date over the same period in 2014, only buses exports dropped, according to Anfavea’s data.
Despite the good news in the foreign market, the Brazilian auto industry is facing a production decline. In May, the drop in auto manufacturing was of 3.4% over April. The industry produced 210,000 unities. Over May of last year, there was also a decline of 25.3%, and year-to-date the drop reached 19.1%. In the first five months of the year, the companies in the sector manufactured 1.1 million vehicles.
Facing the numbers presented until May, Anfavea reviewed its projections for the sector. It estimates a decline of 17.8% in this year’s production against the 10% drop previously estimated. In a press release, the organization explained the reviewing citing the market’s expectation and the confidence of both consumers and businessmen, which is still shaken, impacted by the credit crunch and waiting for a conclusion of a fiscal adjustment in the Brazilian economy.
*Translated by Gabriel Pomerancblum and Sérgio Kakitani
