SAO PAULO, Brazil - Brazil's 10 principal automakers, hurt badly last year by the collapse of their biggest export market and economic slowdown at home, are placing their hopes for 2003 on the development of overseas markets.
According to preliminary figures from the Brazilian automakers' association, ANFAVEA, industry production slipped 2 percent last year to an estimated 1.78 million units. But sales to dealers declined 7.1 percent to 1.49 million units, while retail sales fell 6.5 percent, to 1.5 million units.
The declines, which put the industry back to 2000 levels of sales and output, have been felt industrywide.
"Everyone has the same problems," said Marco Antonio Lage, marketing head at Fiat Automoveis.
Those problems include the lingering effects of a 2001 energy crisis; a devaluation of the local currency, the real; a credit crunch with soaring interest rates; and the collapse of demand in Argentina, a vital customer for Brazil's cars and trucks.
Argentina, where new-vehicle sales plunged last year to an estimated 80,000 or less from 182,000 in 2001 and a peak of 500,000 in 1994, accounted for 50 percent of Brazil's automotive exports just five years ago. That share fell to just 7 percent, or 26,000 units, last year, a 57 percent drop from 2001.
High interest rates, which were raised in December to 25.5 percent by the nation's central bank, also have weighed heavily on the industry.
Last week, Brazilian market leader Volkswagen said it would halt production for 10 days at plants in Anchieta and Taubate. The stoppage, which begins February 24, will trim output of Gol and Polo models by more than 2,000 units a day. Volkswagen said the move was aimed at reducing inventories.