Itaú BBA - Vehicles: Challenges Ahead

Sector Insights

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Vehicles: Challenges Ahead

octubre 16, 2014

More recently, the sector has suffered from a lower number of working days due to the World Cup.

• The Brazilian automotive industry has reached the end of a cycle of expansion that started in 2004. Over these eight years, vehicle production grew by 9% per year and the fleet of passenger vehicles in Brazil expanded to 31 million in 2013 from 18 million in 2005.

• More recently, the sector has suffered from a lower number of working days due to the World Cup. With production recovering faster than sales, the auto industry has been accumulating inventories, suggesting that adjustments will be needed in the months ahead. Employment and business confidence in the sector continue to deteriorate.

• A historically high household debt service ratio, higher interest rates and increases in the IPI are all factors contributing to the moderate sales of passenger cars and light commercial vehicles.

• Low business confidence and uncertainty about internal and external factors tend to lead to investment being postponed, thereby reducing the demand for heavy vehicles.

• The motorcycle segment continues to deteriorate as it heads toward a third year of declines in both production and registrations.


 

Please open the attached pdf to read the full report.

 
 



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