Brazil Auto Sales Up 10% in May image

Auto sales in Brazil increased 10% in May, helped by the government’s tax cuts aimed at supporting the local auto industry.

In May sales of cars, trucks and buses increased 10% in Brazil to 316,264 units and new registrations from January to May are running more than 8% ahead of the first five months of 2012. The sales leader was Fiat with 67,850 new registrations, followed by GM with 53,829 vehicles and VW with 53,442 units. Ford sold 27,546 units in May, Hyundai sold 19,102, surpassing Renault which sold 18,111 vehicles.

Due to increased auto sales in Brazil, output reached record levels in April after the government extended the tax cuts until the end of 2013. As the government extended tax cuts until the end of this year, this alleviated concerns that Brazil’s industrial production will be affected by a difficult global economic environment.

In May 2012, Brazil’s government decided to cut the so-called IPI tax on auto sales after sales jumped, which helped turning the sales drop in the first half of the year into an increase of 4.6% by the end of the year. These tax cuts support the nation’s auto industry, which accounts for 5% of Brazil’s gross domestic product and 20% of the industrial output.

Source: Reuters