(Adds details, forecasts)
By Alberto Alerigi
SAO PAULO Jan 5 Brazil's auto sector has
revised downwards its expectations for a rebound in vehicle
sales this year to just 4 percent from the high single digits,
the Anfavea automakers association said on Thursday, with
political uncertainty and a recession still weighing on a market
that saw sales slump 20 percent last year.
Anfavea President Antonio Megale said that while production
of vehicles in Brazil would jump by 11.9 percent this year to
2.4 million units, sales of new vehicles would only creep up 4
percent to 2.13 million units.
Exports are forecast to climb 7 percent this year to 558,000
units, he said, helped by stronger sales to Colombia, Chile and
Ecuador. A trade deal with Argentina helped boost exports last
year by 25 percent.
"We had a forecast for a much stronger number (for sales)
but we have reduced it to 4 percent because of the economic
situation and, principally, because of the political environment
that we are facing," Megale told a news conference.
Megale had said late last year that he expected a sales
increase for the industry as a whole this year in the high
Yet corruption allegations implicating Brazilian President
Michel Temer and his party are casting doubt on his ability to
remain in office and causing cracks in his coalition, amid
growing calls for early elections.
That could destabilize a return to economic growth expected
this year and derail Temer's agenda of restoring fiscal
discipline, which has been welcomed by business leaders and
The tepid rebound in auto sales this year comes after a
painful 2016 as Brazil's worst recession in more than a century
slashed demand for new vehicles.
Anfavea said sales of newly produced cars in Brazil fell by
20.2 percent in 2016 to 2.05 million units, while production
slumped 11.2 percent.
In a sign of recovery, vehicle sales in December rose by
14.7 percent month on month, the association said.
The recovery in sales is unlikely to spell a major return to
hiring by the sector, Megale said, as the industry as a whole
has about 50 percent idle capacity.
Anfavea's more modest growth forecast for this year was in
line with a prediction by the car dealership association
Fenabrave that sales would grow 2.3 percent in 2017.
(Reporting by Alberto Alerigi; Editing by Daniel Flynn and