According to the Brazilian Motor Vehicle Manufacturers Association (Anfavea), Brazil motor-vehicle sales fell in April as rising auto-loan defaults led to a constriction in auto credit, while output continued to decline on rising stockpiles and tougher environmental regulation.
Vehicle output fell 15.5% to about 260,800 cars and light trucks in April, and sales dropped 14.2% to around 257,900 autos, Anfavea said.
Inventories in Brazil’s auto sector amounted to 43 days’ worth of sales last month, the highest level since November 2008, when stocks reached 56 days of sales.
Banco Votorantim analysts warned (via Reuters) in a Monday note that automakers’ weak April signaled a moderate recovery at best for industrial production, which contracted unexpectedly in March.
“This is a really weak result and undermines impressions of a sustainable recovery for the industry”, said Mariana Oliveira, auto analyst at Tendências Consultoria in Sao Paulo.
“It’s directly related to the shaky domestic market, where we’ve seen slow sales and weak financing this year,” she said, adding that new auto loans in Brazil slipped 12.5 percent in the first quarter from a year earlier.
Banco Volkswagen, the biggest bank focused on Brazil’s auto industry, told Reuters last month it was approving new loans at half the pace of recent years as it sets aside more cash to cover possible defaults.