Auto exports remain strong, partially offsetting domestic market slowdown

After a strong first half compared to the same period in 2024, the second half of the year began with concerning figures for Brazil’s automotive sector. Production reversed its growth trend, ending the third quarter with a 0.8% drop compared to the same period last year. The heavy-vehicle segment contributed the most to this decline, falling 9.4% compared to the third quarter of 2024. Light vehicles also experienced a 0.3% decrease year-over-year.

Despite this downturn, the 2 million vehicle milestone was reached this week. Year-to-date, production remains 6% higher than between January and September 2024; however, data from the last quarter suggests the sector may struggle to maintain this pace.

“The figures from July to September are concerning because they indicate a loss of traction compared to the first half of the year. This presents us with the challenge of achieving a strong recovery in the last quarter, especially given the high comparison base from the end of last year,” said Igor Calvet, president of the National Association of Motor Vehicle Manufacturers (Anfavea).

The best-performing segment this year has been buses, with production up 13.4% compared to 2024, in contrast to a 3.9% drop in truck manufacturing.

Registrations, which rose 7.2% in the first quarter and 2.9% in the second, fell 0.4% from July to September. Retail sales of domestically produced vehicles declined 8.1% year to date — a result that would have been worse without the Sustainable Car program, whose registered models saw a 24% increase in sales.

Even imports saw slower registration rates in September. However, Chinese models recorded their third consecutive monthly record, with over 18,000 new registrations.

Exports remain the sector’s strongest performance indicator, rising 51.6% from January to September 2024 to a total of 430,800 vehicles. However, the situation with Colombia is cause for concern, as the end of the bilateral agreement and the introduction of a 16.1% import tax on Brazilian automobiles, taking effect this October, could impact trade. Colombia is Brazil’s third-largest automotive export market, and despite the Brazilian government’s diplomatic efforts, uncertainty remains about future sales performance there. Another challenge is Mexico’s slowing economy.

Brazil’s second-largest foreign market continues to decline, increasing dependence on Argentina’s growing market.

Exports to Argentina have more than doubled in the first nine months of the year compared to the same period in 2024, rising 130.6%. The volume has been crucial to sustaining the overall 6% increase in production so far this year.

During a press conference, Anfavea president Igor Calvet presented the association’s extensive agenda for COP30, which will take place in November in Belém (PA). “We will unveil a groundbreaking study showing that our vehicle fleet has the lowest carbon footprint on the planet, considering life-cycle assessments, and that Brazil has the potential to continue setting a global example in decarbonization,” Calvet stated.

Source: ANFAVEA

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