Brazil's light-vehicle registrations up 5.4% y/y in April
In April, Brazilian light-vehicle registrations improved by 5.4% year on year (y/y), after flat results in March eased 0.5%, according to initial data from the National Federation of Motor Vehicle Distributors (Federação Nacional da Distribuição de Veiculos Automotores: Fenabrave). Year to date (YTD), the country's light-vehicle sales have improved by 8.7% to 801,330 units. The group reported registrations of 221,321 light vehicles in April 2019, compared with 209,940 units in April 2018. Registrations of medium and heavy commercial vehicles (MHCVs) and buses grew by 44.0% y/y in April 2019, compared with April 2018. In April 2019, 10,631 MHCVs were sold, compared with 7,382 units a year earlier.
Significance: Brazil's automotive market struggled from 2014 to 2016, with an economy marred by recession, a lack of credit availability, and high unemployment. However, the light-vehicle and medium/heavy-duty vehicle markets returned a positive result in 2017 and 2018, and the market is in a recovery. Some of the increases are the result of increased credit availability and assisted by the cooldown in the neighbouring Argentinian market. The banking sector expects vehicle financing to grow by 12% in 2019. Increased credit availability was also a factor throughout 2018, driven largely by one bank that intends to increase its presence in Brazil. In addition, the weakness in Argentina's sales also helped push original equipment manufacturers (OEMs) in Brazil into high gear. There has also been a drastic push in direct sales and growth in fleet volumes. IHS Markit forecasts a gain of 10.3% in 2019, to 2.72 million units. IHS Markit's forward projections now reflect more of a V-shaped recovery and for sales gains through to 2026. IHS Markit will provide a full report of sales, export, and production data based on the findings of Brazil's National Association of Motor Vehicle Manufacturers (Associação Nacional dos Fabricantes de Veículos Automotores: Anfavea) when the data become available.
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