Brazil’s production, exports of automobiles outstrip industry expectations

Brazil’s Vehicle Manufacturers Association (Anfavea) released on Jan 6 its 2022 automotive industry balance sheet, which showed positive numbers for the production and exports of automobiles, as well as stability in sales. “After a tough first four months due to the lack of semiconductors, the industry hit the gas and managed to meet part of the repressed demand in both domestic and foreign markets,” said Anfavea’s president Márcio de Lima Leite.

Production — With 191,500 automobiles leaving the assembly line in December, the year 2022 ended with 2.37 million units produced, a 5.4% increase over 2021 – well above the 4% that the industry association had previously forecasted. This performance was driven by a substantial reduction in plant shutdowns in the second half of the year, as well as a partial improvement in the delivery of electronic components.

For 2023, the industry projects a 2.2% increase in automobile output, with 2.42 off the assembly lines. A rise of 4.2% is expected in the production of cars and other light commercial vehicles, accompanied by a drop of 20.4% in the production of trucks and buses. The heavy-duty segment will be impacted by the change in the emission rule to Proconve P8, which should cause an inevitable price adjustment.

Domestic market — Keeping with tradition, December was the month with the highest sales volume, with 216.9 thousand licensed units, outperforming last year by 4.8%. Year-to-date figures reached 2.104 million units, 0.7% below the total for 2021, confirming the stability picture that Anfavea expected since the middle of the year.

The cars and buses sectors outperformed the previous year, but a drop in trucks and light commercial vehicles lowered the overall industry performance. The association foresees 2.17 million vehicle sales in 2023, a 3% increase over 2021. Light vehicle sales are expected to increase by 4.1%, while heavy vehicles are expected to see an 11.1% drop.

Exports — This was the most positive index for the automotive industry in 2022. Anfavea projected an increase of 22%, but the 480.9 thousand vehicles exported in the year represented a growth of 27.8% over 2021. That was surprising given the foreign trade restrictions imposed by a crisis-stricken Argentina, Brazil’s biggest trading partner.

On the other hand, significant growth in the exports of automobiles to all other Latin American markets, particularly Mexico, Colombia, and Chile, enabled this good year-end result. Exports increased by 37.6% in value, owing to increased shipment of vehicles with higher added value, such as SUVs, trucks, and buses. The expectation for 2022 is a slight drop of 2.9%, still driven by Argentina. According to the industry association, total exports will total 467,000 units.

Sharing is caring!