Credit Concerns To Mar Vehicle Growth Potential

The increase in default rates on cars, motorcycles and trucks from 3.1% in October 2010 to 4.7% during the same month in 2011 (according to estimates from Banco do Brasil) and continued delays in loan repayments in Brazil are setting the stage for a significant moderation in vehicle credit growth and hence demand during 2012. On the back of our expectation of restricted credit to consumers and overall inflationary pressures in the country, we are currently forecasting new vehicle sales growth to slow to 7% year-on-year (y-o-y) in 2012 - significantly lower than the nearly 10% y-o-y growth expected in

To read the full article, please choose one of the following options: