Brazil's July car sales declined by 4.9 percent from the previous month, to 285,416 units, according to the Brazilian Motor Vehicle Manufacturers Association (Anfavea). Sales were down by 0.9 percent in July from the same month of last year.
According to the report, Brazil's automobile production fell 0.9 percent in July from the previous month and plunged 11.5 percent from the same month a year earlier to 281,600 unit,s due largely to reduced exports, Anfavea added.
Anfavea President Jackson Schneider said that despite the decline, July registered the third-largest number of montly sales in the industry's history.
Car sales in the first half of the year increased by 2.4 percent from the prior year to 1.73 million units. First-half sales set new a record, and Anfavea now forecasts domestic auto sales will hit their highest-ever total of three million units this year.
Regarding the future outlook, Mr. Schneider said, "We will produce 2.6 million cars this year just for the local market, and that's more than the 2.4 million we did last year."
The unprecedented June sales can be explained by the government's tax break on new car sales, which allowed consumers to buy cars at discounts ofup to 7.4 percent. However, that same month, the government announced an extension of the tax break benefits through October. This tax break extension as well as a stronger currency can explain the drop in July sales as consumers can now delay their purchases and foreign countries have to face higher prices. For instance, according to Anfavea, exports in July also feel 3.2 percent from the previous month and were down 50.1 percent compared to July of last year.