Brazil: automotive industry sales fall in January, Anfavea says

Brazil’s automotive industry posted declines in both production and sales in January, according to data released on Friday (6) by the Anfavea.

Vehicle output fell 12% compared with the same month last year and dropped 13.5% from December, with total production reaching 159,600 units.

Sales declined 0.4% year on year and plunged 39% from December levels, with 170,500 vehicles licensed. Anfavea said January sales were “virtually stable” on an annual basis due to one fewer working day in 2026.

By segment, passenger car sales rose 1.4% year on year, while light commercial vehicles increased 3%. In contrast, registrations of heavy vehicles declined in January, with bus sales down 33.9% and truck sales falling 31.5%.

One of the highlights in licensing data was electrified vehicles, which accounted for a record 16.8% of total sales. According to Anfavea, 35% of these electrified vehicles are produced domestically.

“This is the best percentage in our historical series. Around 27,000 units were registered, and 9,600 of those were produced here in Brazil,” said Anfavea president Igor Calvet.

Exports, meanwhile, fell 18.3% compared with January 2025, totaling 25,900 units shipped. Anfavea said the decline was driven mainly by a 5% drop in shipments to Argentina. Compared with December, however, exports rose 38.3%.

“This was driven by a 5% reduction in Argentine demand. This is something Anfavea continues to monitor closely, as it may signal a slowdown in demand from our neighboring country, one of Brazil’s main automotive trading partners,” Calvet said.

Programs

Speaking at a press conference, Calvet welcomed the government’s decision not to extend the tax exemption on imports of disassembled vehicle kits, which expired in January. One of the companies benefiting from the exemption had been Chinese automaker BYD, which operates in Brazil largely under the SKD model, in which vehicles are imported nearly complete and assembled locally with lower industrial complexity.

“I welcome this because I believe the non-extension encourages local production. By not extending it, we are all moving toward more sophisticated manufacturing, greater localization and more job creation here. This is a position in defense of domestic production,” he said.

On the Sustainable Car program, which eliminates the industrial products tax (IPI) on entry-level vehicles made in Brazil with high energy efficiency and sustainability standards, Calvet said he does not expect the initiative to be renewed.

“The Sustainable Car program was an important driver of light vehicle demand in the country,” he said, noting that it resulted in 282,000 vehicle registrations, 22% more than before the program existed. “But I don’t believe it will be extended because it is anchored in the IPI, and the IPI has an end date, as tax reform will take effect from 2027,” he added.

As for the Move Brasil program, which offers credit lines for truck purchases, Calvet said the sector is waiting to see its impact in the coming months. “We expect the results to start showing up in February and March. The program has all the conditions to be a success,” he said.

Source: Elaine Patrícia Cruz, reporter at Agência Brasil

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