Ford Motor hopes the auto market in Brazil to set a new record by the end of 2012 after the record-low interest rates and tax breaks revived the stagnant dealerships.
Rogerio Golfarb, Ford’s head of corporate affairs in South America, said that the market would see “a really strong pickup in the second half of the year due to government measures.”
After sales in Brazil more than doubled since 2005, in 2012 the auto industry in Brazil decreased alarmingly. In order to boost consumer demand in Brazil, the government cut taxes on select products and also proposed the central bank to lower interest rates to historic lows.
Although the company is confident it will reach growth this year, analysts estimate that 4 to 5% growth for 2012 is quite ambitious and that Ford will shrink for the first time in nearly a decade.
“The race for market share in a world that’s not growing could lead to overproduction,” Golfarb said. “Our concern is to avoid that.”
Although Ford was the first auto maker in Brazil holding the 4th place in the market for years, the new comers are gaining fast, such as France’s Renault which increased its market share from 3.1% in 2007 to 6.7% in May 2012.