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Brazil's light-vehicle registrations increase 20.2% y/y in May
Brazilian light-vehicle registrations increased 20.2% year on year (y/y) in May, according to initial data from the National Federation of Motor Vehicle Distributors (Federação Nacional da Distribuição de Veiculos Automotores: Fenabrave). In the year to date (YTD), the country's light-vehicle sales have improved by 11.1% y/y to 1,035,481 units. The federation reported registrations of 234,173 light vehicles in May 2019, compared with 194,889 units in May 2018. Registrations of medium and heavy commercial vehicles (MHCVs) and buses grew by 61.91% y/y in May. In May 2019, 11,293 MHCVs were sold, compared with 6,975 units a year earlier.
Significance: Brazil's automotive market struggled from 2014 to 2016, amid an economy marred by recession, a lack of credit availability, and high unemployment. However, the light-vehicle and MHCV 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 are assisted by the cooldown in the neighbouring Argentinian market. The Brazilian banking sector expects vehicle financing to grow by 12% in 2019. Increased credit availability was also a factor in registrations 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 OEMs in Brazil into high gear. There has also been a drastic push in direct sales and growth in fleet sales volumes. IHS Markit forecasts a 10.3% increase in registrations to 2.72 million units in 2019. IHS Markit's projections now reflect more of a V-shaped recovery for the market and sales gains through 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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