Vehicle production stagnates in Brazil due to deterioration in the trade balance

Vehicle production stagnated in Brazil last January, weighed down by a sharp drop in exports to Latin America and by the increase in imports, especially of Chinese electric cars, as reported this Thursday by the sector’s employers’ association.

Production in January was 153,000 vehicles, a figure equal to that of the same month last year, according to data released by the National Association of Automotive Manufacturers (Anfavea).

Domestic sales, traditionally good in January, expanded by 13.1%, but the external market experienced a sharp deterioration.

Exports fell by 43%, mainly weighed down by the drop in sales to Argentina (-19%), Mexico (-19%), Colombia (-79%) and Chile (-60%), which Anfavea attributed to the economic slowdown in neighboring countries.

On the contrary, international purchases grew, leading imported automobiles to have their largest market share (19.5%) in the last decade, with a total of 31,483 vehicles sold in January.

Of that percentage, 46% corresponds to cars manufactured in Argentina and 25% in China, a country whose sales to Brazil are expanding at a faster rate thanks to electric cars.

However, the president of Anfavea, Márcio de Lima Leite, was optimistic and stated that “Brazil is experiencing the expectation of the greatest growth cycle in the history of its automobile industry”.

This is due to the planned investments of 100,000 million reais (about US$ 20,400 million) until 2029, which have been announced by various multinationals.

The Brazilian vice president, Geraldo Alckmin, spoke at the presentation of the production data and highlighted that Brazil is going through a moment of structural reforms and macroeconomic stability.

Likewise, he assured that the Government is working to attract investments to the country, which generate jobs and contribute to strengthening “an export industry”.