Itaú BBA - Vehicle sales increase in Brazil, but remain at very depressed levels

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Vehicle sales increase in Brazil, but remain at very depressed levels

Junho 3, 2020

Vehicle sales remain very depressed levels, after dropping 40.7% mom/sa and 63.2% mom/sa in March and April, respectively

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Brazil

COVID-19 update: the latest official information from the Ministry of Health is that Brazil has 555,383 confirmed cases (up by 28,936 vs 12,247 from the day before), with 31,199 confirmed deaths (up 1,262 compared to the 623 increase in the day before), which implies a 5.6% mortality rate. There are now 223,638 recovered cases (up by 12,558 vs 4,525). Regarding the ICU occupation, in São Paulo, the rate of beds for COVID-19 patients stands at 61% in the capital (stable), after the sharp increase in the number of beds this week, and 74% in the state (from 69%).

According to Fenabrave, vehicle sales reached 62.2k in May, increasing 13.8% mom/sa (our seasonal adjustment). In year-over-year terms, sales receded 74.3%. The breakdown shows a 12.5% mom/sa advance in “passenger cars + light vehicles”, and a 29.4% mom/sa growth in “trucks + buses”. It’s worth mentioning that, despite this improvement at the margin, vehicle sales remain very depressed levels, after dropping 40.7% mom/sa and 63.2% mom/sa in March and April, respectively.

Itaú Daily Activity Index: Our Daily Activity Index has dropped 4.6 p.p. in the last available day (Saturday, May 30th) to 69.9, while the 7-day moving average increased slightly, by 0.5 p.p., to 71.8. The index is down 30% when comparing the latest data available with the first half of March. See our report here.

Day Ahead: The industrial production for April will be released at 9:00 AM (SP time), for which we forecast a 25.0% mom/sa decline, driven by the social distancing measures that were in place during the whole month. The main negative highlight will be auto production, which was close to zero units in the month, according to Anfavea. Other sectors are likely to show greater resilience, such as mining/extractive, food and paper production.



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