SAO PAULO, Brazil -- Domestic sales of motor vehicles in Brazil dropped 1.1 percent in the first quarter of 2003 from year-ago levels due to high interest rates, but strong exports propelled production 10.5 percent.
Brazil's National Association of Vehicle Manufacturers (Anfavea) said on Monday about 332,400 new vehicles, including cars, trucks and buses, had been registered between January and March, while 444,500 units had been produced.
Exports, helped by weakness in the Brazilian currency, the real, against the dollar following a 35 percent depreciation in 2002, soared 43.8 percent to $1.1 billion.
But as high interest rates after months of hikes took their toll on the economy, automobile sales, an important economic indicator in Brazil, painted a gloomy picture.
In March alone, registration of new vehicles, including imports, slumped 17.2 percent year-on-year and 13 percent from February. Even output demonstrated sharp declines -- 6.9 percent and 7.3 percent, respectively.
"The consumer is cautious. I wouldn't say that we are in a crisis, but we do not see any type of recovery in the market in the short run," Anfavea President Ricardo Carvalho told reporters.
Nevertheless, Anfavea is sticking to its forecast of selling 1.5 million cars, buses and trucks in 2003, a 1 percent increase over the 1.49 million sold last year but well short of the 1.6 million sold in 2001.
Vehicle sales suffered in 2002 as Brazil was hit by interest rate hikes, designed to tame inflation stemming from the currency's slump, and a slowdown of growth both at home and in export markets.
Most of the world's biggest vehicle manufacturers, including Volkswagen, Fiat, Ford Motor Co. and General Motors, have plants in Brazil, where they produce for the large local market and export to markets in Latin America and beyond.