Thursday, 6 October 2011 at 17:54, Reuters, Sao Paolo
Automakers in Brazil produced about 261,200 new cars and trucks last month. (REUTERS)
Automobile production and sales dropped sharply in September, the national automakers' association said on Thursday, the clearest sign yet of a slowdown in Latin America's largest economy.
Auto production plummeted 19.7 per cent and sales were down 4.9 per cent in September from August, according to data released by industry group Anfavea.
Automakers in Brazil produced 261,200 new cars and trucks last month, while sales totaled about 311,600 vehicles.
The sharp fall in production is a reaction to growing inventories and cooling demand as Brazil's economy slows from 7.5 per cent last year to an expected 3.5 per cent this year.
Brazil is a key market for the world's biggest automakers, including Italy's Fiat SpA, Germany's Volkswagen AG and US-based General Motors Co and Ford Motor Co. Asian automakers are also increasing their presence here.
Of the big four, Fiat saw the biggest sales losses last month, down 10 percent to 47,425 units.
Volkswagen remained No. 1 in the market with 50,222 vehicles sold, a fall of 8.8 per cent.
The government last month announced a hefty increase in taxes on cars that have less than two-thirds of their parts made locally. The move was designed to slow fast-growing imports and may encourage capital spending in factories and technology.
The Renault-Nissan Motor Co Ltd partnership this week announced a major expansion of its Brazil operations with investments of around $1.7 billion.
Anfavea expects manufacturers to invest around $19bn in Brazil in the five years through 2015.
GM sold 45,187 vehicles in September, a 1.3 per cent fall from August, while Ford sales sank 7.7 per cent to 20,069 vehicles.
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