* Dealers' association expects 8.05 percent rise from 2011
* Car sales jumped in August to all-time high
* Italy's Fiat held on to market leadership
SAO PAULO, Sept 4 Brazil's car dealers'
association raised its sales forecast for this year after data
released on Tuesday showed that government tax breaks helped
spur record sales in August, the latest sign that the country's
economy is starting to rebound.
The association, known as Fenabrave, now expects sales to
rise 8.05 percent in 2012 to 3.7 million vehicles, in sharp
contrast to its previous forecast for a 0.4 percent drop.
Sales jumped last month as customers rushed to take
advantage of a tax break for automobiles that was supposed to
expire at the end of August. Sales in August surged 28.3 percent
from the year-earlier period to an all-time high of 420,100
vehicles, Fenabrave said.
Last week, Brazil's government announced it was extending
the tax breaks for locally made cars by two months to further
bolster the economy. The tax breaks have allowed dealers to
lower showroom prices.
The car industry makes up for more than 20 percent of
Brazil's manufacturing sector, which has been struggling with
high costs and a weak global economy. A rise in car output
helped Brazilian industrial output post a modest gain for the
second straight month in August.
Tax breaks have provided much-needed relief for the local
auto industry after credit tightened and sales stalled in the
first half. President Dilma Rousseff's government also capped
imports from Mexico, the most protectionist shift in Brazil's
auto sector since it opened up to imports two decades ago.
But production has been slow to recover as carmakers focus
on clearing inventories and bracing for a potential hangover
after the tax relief expires.
In the first eight months of the year, vehicles sales are up
5.5 percent to 2.5 million units.
Fiat held on to the top spot in Brazil's auto
market in August, with sales of 98,200 cars and light trucks and
a market share of 24.2 percent. Volkswagen followed
in second place with sales of 88,760 vehicles and a market share
of 21.9 percent.
General Motors was third with 75,860 vehicles sold
and a market share of 18.7 percent, while Ford tallied
31,000 sales and a market share of 7.7 percent.
Brazil's carmaker association Anfavea will release its own
data on car output and sales for August on Thursday.