Brazil: Auto output down 7.6% on Year despite sales jump image

Automobile production in Brazil fell in June to 261,333 cars and light commercial vehicles, a 4% drop from the 2011 month.

Auto output dipped 2.6 percent while sales jumped 22.9 percent in June from May, automakers association Anfavea said on Thursday. June is the third consecutive month that output has fallen below the previous year’s levels.

The figures for output and sales could have been even worse if the Brazilian government had not introduced in May a package of tax cuts and credit-easing measures aimed at stimulating the economy, the association said.

Exports totaled 29,885 vehicles in June, up 4.3% on the month but down about 36% on the year. Exports in the first half fell 28.4% on the year to 173,472 units.

That drop in production has led a number of companies to cut jobs at some of their factories.
General Motors (GM) is planning a “drastic” number of layoffs in Brazil later this month as it seeks to bring production in line with falling demand, an autoworkers union said.

Volkswagen AG has also announced job cuts as they shift production to adapt to the new demand outlook.

The Brazilian unit of Volvo AB said Thursday it has cut 208 jobs at its Curitiba truck factory as demand falls in Latin America’s biggest economy.
Volvo said it too expects sales to improve in the second half and, so while they eliminated 208 positions, they also hired 366 workers who were working on limited-time contracts as full-time workers.

Mercedes-Benz also announced it would cut 1,500 workers in May.

Brazil’s car and light truck sales last fell in 2003 and have averaged double-digit growth since.