Brazil auto sales and production reach record levels in August image

Brazil car manufacturing and sales have reached record levels in August, fueled by government tax breaks.

Sales rose 15.3 percent, while vehicle output increased 10.6 percent in August from July, the national automakers’ association ANFAVEA announced on Thursday.

Vehicle sales reached a record 420,100 units in August, up 28.2 percent from a year earlier, as consumers took advantage of the tax cuts, which were due to expire at the end of August. However, last week the government extended the measures for another two months.

In May, the Brazilian government unveiled tax breaks aimed at boosting consumer demand in order to offset an economic slowdown and protect jobs in the auto industry.

Brazil’s auto industry makes up more than 20 percent of the country’s manufacturing sector, which is suffering from high costs and a weak global economy. Automakers in Brazil produced a record 329,300 new cars, trucks and buses last month, up 1 percent from the same month last year. However, for the year-to-date production was down 7.2 percent compared with the first eight months of 2011.

Sales for the year-to-date rose 5.5 percent from the first eight months of 2011. Brazil’s dealership association, FENABRAVE, now expects sales to rise 8.05 percent in 2012 to 3.7 million vehicles.