Industry Trend Analysis - Passenger Car Sales Outlook Brightening Further - DEC 2017

BMI View: Brazil's passenger car sales will expand by a strong 17.2% in 2018 thanks to continued improvements in key macroeconomic indicators of private consumption, namely growth in employment, rising real wages and falling borrowing costs. Only the stubborn weakness in consumer confidence lies in the way of a more meaningful recovery in passenger car demand.

We believe the biggest boost to Brazilian vehicle sales in 2018 will come from the passenger car segment, which we forecast to grow 17.2% to 2.18mn units for the year. This view is predicated on our belief that households look set to benefit the most from the forecasted cyclical recovery in economic activity during 2018. Our Country Risk team forecasts real GDP growth to accelerate to 1.7% in 2018, up from an estimated 0.4% in 2017, with a view that this uptick will be driven mostly by a recovery in household private consumption, which will rise by 1.5% ( see ' Political Uncertainty Will Constrain Recovery ' , September 29).

Three Main Drivers Of Recovery

Passenger Cars Outperforming In 2018
Brazil - New Vehicle Sales Forecasts By Segment, % chg y-o-y
f = BMI forecast. Source: ANFAVEA, BMI

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