Brazil’s production of vehicles slipped 15.8 percent in February from the same month in 2021. According to a report released in São Paulo today (Mar. 8) by the country’s national association of car makers Anfavea, 165.9 thousand units were built in February this year. Compared to January, however, the number is up 14.1 percent.
The sales of new vehicles in February also faced a 22.8 percent shrinkage against the same month last year. A total of 129.3 thousand units were licensed in the second month of 2022.
In this beginning of the year, Anfavea President Luis Carlos Moraes, the industry is still tackling the challenges from last year. “The number is in line with what we imagined, facing challenges posed by [coronavirus variant] Omicron and also by the lack of auto parts,” he declared.
Automobiles and trucks
The production of automobiles and light vehicles decreased 16.9 percent in February compared to the same month in 2021, with its 152.6 thousand units manufactured. Sales in this category shrank 24 percent from February last year, when 120.4 thousand units were sold.
Truck production was down 3.5 percent in February compared to the same month in 2022, which saw the manufacture of 11.4 thousand units. Sales, however, were up 2.1 percent, as 7.9 thousand units were traded.
Exports and employment
Exports were up 25.4% in February against February 2021, when 41.4 thousand units were sold abroad. Part of the increase in the month, Moraes argued, comes as a result of the cargo that could not be shipped in January and could not be sent to its destination until the following month. In the figures for January and February combined, compared to the first two months of 2021, the performance is still a 17.3 percent increase, with the export of 69,100 vehicles.
The number of jobs in industry in February is 3.2 percent lower than in the same month last year, when 101.3 thousand people were employed.
Ukraine
Moraes argued it is still difficult to estimate the impact of the war in Ukraine on Brazil’s auto industry. “It is too early to come up with numbers for the impact the war may have on Brazil or its auto sector,” he noted.
However, he did list risks that the armed conflict may bring to markets such as hikes in commodity prices and more severe shortages in semiconductors produced by Ukraine and Russia, major producers of palladium and neon gas. In addition, Moraes went on, the war may send air and sea freight prices soaring.
Tax
The reduction in the rates for the Tax on Industrialized Products—known in its original Portuguese acronym as IPI, announced by the federal government at the end of last month—should slash the final price of vehicles in some categories by 1.7 to 4.1 percent, as per Anfavea estimates.
