Brazilian auto sales plunged 31 percent in September from a record-breaking August, an industry group said on Monday, as the effect of extended tax breaks waned on consumers.
Sales of cars and light trucks were also down 8 percent compared with September of last year, according to data from dealer association Fenabrave.
The flagging sales reflect the diminishing returns of tax incentives announced in May. Originally due to expire in August, they have since been extended to the end of October to bolster an emerging economic recovery.
Expectations that the tax breaks would end in August led to a rush of promotions, helping to set an all-time monthly sales record but potentially reducing demand in September.
The car industry makes up more than 20 percent of Brazil’s manufacturing base, which has been struggling with high costs and a weak global economy. A rise in car production bolstered expectations that Brazilian industrial output could post its biggest gain in two years in August.
Fenabrave said a total of 288,100 cars, light commercial vehicles, buses and trucks were registered in September.
Fenabrave data shows 2.79 million vehicles have been registered so far this year, up 4 percent from the first nine months of 2011.
Brazil is a key market for the world’s biggest automakers, including Italy’s Fiat SpA, Germany’s Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co.