{"id":87095,"date":"2024-02-13T07:29:03","date_gmt":"2024-02-13T10:29:03","guid":{"rendered":"https:\/\/murray.adv.br\/?p=87095"},"modified":"2024-02-13T07:29:04","modified_gmt":"2024-02-13T10:29:04","slug":"car-sales-grow-but-production-stagnates","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/car-sales-grow-but-production-stagnates\/","title":{"rendered":"Car sales grow, but production stagnates"},"content":{"rendered":"\n
Carmakers face competition from abroad both in the domestic market and in exports<\/strong><\/em><\/h6>\n\n\n\n

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02\/13\/2024 <\/p>\n\n\n\n

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\"M\u00e1rcio<\/figure>\n<\/div>\n\n\n

M\u00e1rcio de Lima Leite \u2014 Foto: Marcelo Camargo\/Ag\u00eancia Brasil<\/em><\/p>\n\n\n\n

Despite successive months of growth in car sales in Brazil, the industry\u2019s production is not advancing. In 2023, while the domestic market grew by 9.7%, production fell by 1.9%. Now in January, again: domestic sales increased by 13% compared to the same month in 2023, but the number of vehicles leaving Brazilian factories was exactly the same as a year ago. The local industry is losing ground both in exports to neighboring countries and in the domestic market, because competitors from other countries are advancing on both fronts.<\/p>\n\n\n\n

The speed of the decline in exports began to attract attention in the second half of 2023. The sector closed the year with 403,900 vehicles shipped, a decline of 16% compared to 2022, a year marked by a recovery in foreign trade after the peak of the pandemic. Last month, 19,000 vehicles were exported, 43% less than in January 2023.<\/p>\n\n\n\n

Announcing the performance of the first month of the year on Thursday (8), the National Association of Motor Vehicle Manufacturers (Anfavea) pointed to the weakening of economic activity in neighboring countries such as Argentina and Chile as the main factor behind the drop in shipments.<\/p>\n\n\n\n

To this must be added the loss of space to competitors from other countries, an issue raised by the same organization a few months ago.<\/p>\n\n\n\n

For some time now, the Brazilian automotive industry has been facing strong competition, especially from Asia. This can be seen throughout South America, which used to rely on Brazilian factories as its main source of vehicle supply. Chinese brands are taking advantage of the region\u2019s growing consumer interest in hybrid and electric models to make inroads in the region with new products in this segment. The Brazilian industry has a small supply of these products, limited to a few hybrids and no electrics.<\/p>\n\n\n\n

In Colombia, for example, where local vehicle production is low, the share of hybrids and fully electric car in the local market rose to 16.9% last year from 10.6%, according to the National Association for Sustainable Mobility (Andemos). Total vehicle sales in the country fell by 28.9% during the same period. Brazil\u2019s vehicle exports to Argentina and Mexico fell 19% in January, according to Anfavea president M\u00e1rcio de Lima Leite. For Colombia and Chile, the decline was 79% and 60%, respectively.<\/p>\n\n\n\n

Foreign competition is also on the rise in Brazil\u2019s domestic market, the largest in the region and the eighth largest in the world. Foreign brands are taking advantage of the increase in demand for cars, largely due to the drop in interest rates.<\/p>\n\n\n\n

In January, 161,100 vehicles were registered across the country, an increase of 13.1% compared to the same month last year. The car segment drove this growth with 152,200 units, 16.5% more than in January 2023.<\/p>\n\n\n\n

<\/a>A year ago, imported cars accounted for 14.3% of the new car market in Brazil. Last month, they reached 19.5%. As a result, the pace of production in Brazilian factories is not keeping pace with the growth in demand.<\/p>\n\n\n\n

The president of Anfavea is concerned about the advance of foreign brands that don\u2019t produce in the country. \u201cImports must be at a level that doesn\u2019t harm the industry,\u201d said Mr. Leite.<\/p>\n\n\n\n

The Chinese are leading this foreign race. In the last four years, Argentina\u2019s share of the Brazilian import market\u2014from where the carmakers themselves import, taking advantage of the free trade agreement\u2014has fallen to 46% from 63%. Mexico\u2019s share also fell, to 11% from 15%. But China\u2019s share jumped to 25% from 2%.<\/p>\n\n\n\n

Anfavea sees the increase in imports in January as a result of the increase in sales of hybrid and electric models, which are largely produced abroad. According to the organization, among the cars imported in January, 14% were electric and 19% were hybrids.<\/p>\n\n\n\n

Chinese brands stocked up on these models, taking advantage of increased demand from consumers who wanted to make a decision before the increase in import tax.<\/p>\n\n\n\n

In January, the import tax on fully electric cars, which had been exempt since 2016, came back into effect, along with an increase in the rates for hybrids, which had been reduced during the same period. Most brands maintained their prices in January, due to the inventory accumulated before the tax increase.<\/p>\n\n\n\n

According to the Brazilian Association of Electric Vehicles (ABVE), last month was the best January and the second-best month since the organization\u2019s record began. Sales of hybrid and electric vehicles totaled 12,020 units, an increase of 167% over the same month last year. The import tax will increase gradually, starting at rates of 10% to 12% in January and rising to 35% in July 2026. Time will tell whether the tax hike will restore the competitiveness of the local industry.<\/p>\n\n\n\n

Meanwhile, carmakers with factories in the country are moving to revamp their product lineups and expand the range of electrified models. A few days ago, Volkswagen announced a new investment of R$9 billion for the 2024-2028 period, revealing that most of the funds will go towards a new platform developed specifically for use in hybrid models that can be fueled with ethanol. Last week, Valor reported that the volume of investments announced by the automotive industry in the country since 2021 for the current decade totals R$41.4 billion.<\/p>\n\n\n\n

*Por Marli Olmos\u00a0\u2014 S\u00e3o Paulo<\/p>\n\n\n\n

Source: Valor International<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

Carmakers face competition from abroad both in the domestic market and in exports 02\/13\/2024 M\u00e1rcio de Lima Leite \u2014 Foto: Marcelo Camargo\/Ag\u00eancia Brasil Despite successive months of growth in car sales in Brazil, the industry\u2019s production is not advancing. In 2023, while the domestic market grew by 9.7%, production fell by 1.9%. Now in January, […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[24606,24607],"class_list":["post-87095","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-car-sales-grow","tag-production-stagnates"],"yoast_head":"\nCar sales grow, but production stagnates - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/car-sales-grow-but-production-stagnates\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Car sales grow, but production stagnates - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"Carmakers face competition from abroad both in the domestic market and in exports 02\/13\/2024 M\u00e1rcio de Lima Leite \u2014 Foto: Marcelo Camargo\/Ag\u00eancia Brasil Despite successive months of growth in car sales in Brazil, the industry\u2019s production is not advancing. 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