Fiat SpA’s (F.MI) commercial director for Brazil Tuesday said he expected the country’s car market to grow between 3% and 5%–if not more–this year as lower interest rates revive demand.
“We think it’s going to grow at the same rate as (Brazil’s) GDP,” Lelio Ramos told Dow Jones Newswires on the sidelines of a car industry event. “Maybe more.”
Ramos said growth would mostly come in the small- and medium-sized car segments of the market.
Ramos said the market would no longer register the fervent growth rates of previous years such as 7% or 8%.
“We won’t grow the way we used to grow,” he said.
In the first half of January, Brazilian sales of cars and light commercial vehicles totaled 119,344 units. Although the number represents a 4.7% rise from the same period last year, it is a 24% decline from the previous month–December–a traditionally strong period for sales.
For all of 2012, the industry associations expect sales to grow between 4% and 5% as the central bank cuts the benchmark interest rate, making it cheaper for consumers to take out loans to buy new cars.
In 2011, Brazilian sales gained 2.9%, less than the 4.2% growth rate that had been expected by car dealer association Fenabrave and the 5% forecast by car maker association Anfavea. These sales missed expectations because of an increase in interest rates as well as credit costs in the first half of the year–measures which were reversed in the second half.
Fiat is the biggest car maker in Brazil by unit sales and Brazil is where its car business–excluding U.S. partner Chrysler Group LLC–makes nearly all its profit.
Source: 4 Traders
