Brazil's Vehicle Production Returns to Pre-crisis Levels
CRI English, Apr 15, 2009
Brazil's auto industry now sees the recovery of vehicle production, months after the beginning of the economic turmoil that swept across the world, local daily Folha de Sao Paulo reported on Tuesday.
Vehicle production returned to pre-crisis levels in at least two factories -- General Motors (GM) and Volkswagen, the daily reported, adding that employees of the country's main manufacturers are working extra hours to meet the increasing demand for new vehicles.
Both vehicle production and sales in Brazil plunged in the last quarter of 2008 amid the international financial crisis. However, the sector experienced a recovery in the first quarter of 2009, due to a cut in the industrialized products tax (IPI) carried out last December by the government.
The cut, which will last until June, triggered a record-high sales of 271,494 new vehicles in March, up 17 percent from the same period of 2008.
The car sales for the first quarter this year reached record-high levels as well, with 668,314 registered sales.
The sector enjoys good prospects, said Brazil's Development, Industry and Foreign Trade Minister Miguel Jorge. On Monday, in a business seminar in Sao Paulo, the minister said that the auto industry will register in 2009 the same sales level as in 2008, which was 2.8 million units.
He said Brazil has a low car-inhabitant ratio, compared with countries such as Argentina and Mexico, which means that the potential for expansion is vast.
He also said some manufacturers are to invest in Brazil this year. In the same day, the Brazilian branch of U.S. manufacturer GM announced that instead of remitting its dividends to the main branch, it will keep them in Brazil for the investment plans, which foresee investments of up to 1 billion U.S. dollars until 2012.