Industry Trend Analysis - Sales Declines Hide Undercurrent Of Recovery - JUNE 2017

BMI View: A return to growth in real effective earnings and a modest uptick in purchases of vehicles without finance are indications of the recovery in consumer demand for autos that we are forecasting fo r 2017 . We stress, however, that we still only forecast a weak recovery, given that high unemployment, a high debt burden, and high auto loan rates will all still hold back sales volumes.

While sales of passenger cars in Brazil declined 2.8% y-o-y in Q117, we are sticking to our view that sales will rise 4.0% for the full year 2017. In this piece of analysis, we highlight a number of promising signs of recovery in consumer demand for autos that back up our view. We do, however, acknowledge the headwinds for the industry that will mean this recovery is only weak and that volumes will still remain critically low compared to pre-2013 sales volumes.

Green Shoots Of Consumer Recovery Emerging

Sticking To View Of A 2017 Car Market Recovery
Brazil - Passenger Car Sales, Units & % chg y-o-y
e/f = BMI estimate/forecast. Source: ANFAVEA, BMI

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