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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – After a year of declines in both vehicle production and sales, automakers expect the market to recover in 2017 according to the National Automobile Manufacturers Association (Anfavea).

Brazil,Automobile manufacturers Association forecasts growth in auto sales and production in Brazil this year,
Automobile manufacturers Association forecasts growth in auto sales and production in Brazil this year, photo by Marcelo Camargo/Agencia Brasil.

Anfavea estimates that sales will grow by four percent this year compared to the 2.05 million units sold in 2016, and that exports will be one of the deciding factors in this increase. For auto production, the entity forecasts a 11.9 percent increase, to 2.41 million units.

“The issue of export is fundamental so that we may use our productive capacity, since the domestic market is still quite weak. The increase in exports allows production to remain at better levels,” said Anfavea president, Antonio Megale, on Thursday during the presentation of 2016 results and 2017 forecasts.

According to Megale, automakers are counting on closing some agreements that are in the final stages of negotiations, such as talks between Brazil and Colombia. Last year, although final numbers were weak, foreign sales grew by 24.7 percent to a total of 520,200 units. For 2017, the entity forecasts an expansion of seven percent in vehicles exports.

With the low confidence level and political and economic instability faced by Brazil in 2016, the vehicle sector faced a reduction of 20.2 percent in automotive sales and a 11.2 percent decline in production compared to 2015.

But the latest economic indicators show a slow recovery in Brazil for 2017 and Anfavea officials are beginning to see a light at the end of the tunnel. “The macroeconomic scenario indicates positive results, with GDP growth, inflation converging towards the center of the target, continuing reduction of the benchmark interest rate and the stabilization of the US dollar,” said Megale.

With the more optimistic scenario Anfavea also bets on a growth of investments, which would lead to an increase in sales of trucks and agricultural machinery by 6.4 percent and 13 percent respectively.

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