Hit by semiconductor crisis, Brazilian auto industry struggles to accelerate

The Brazilian auto industry has been facing turbulent conditions for a while now, but the pandemic, plus a global crisis in semiconductor production, further reduced expectations of recovery. Even though the data show that the sector is performing better than last year — when Covid-19 took everyone by surprise and further weakened an already struggling economy and increased unemployment to record levels — there is still a long way to go for the industry to return to pre-pandemic levels. 

According to the National Association of Automotive Vehicle Manufacturers (Anfavea), the auto sector is facing difficulties that are more due to restricted supply than to depressed demand. In a survey of Webmotors users, a Brazilian car and motorcycle buying and selling startup, 75 percent of respondents answered that they intend to buy a new car or trade in their old one this year. 

When asked for reasons they might postpone their purchase, 58 percent complained about high vehicle prices. Financial uncertainty, high interest rates on financing, and lack of models in the market were other reasons mentioned, though less frequently.

“There is still a lot of interest in buying a new car. By improving supply, we will be able to service our customers — the demand is there,” stated Luiz Carlos Moraes, Anfavea’s president, during the presentation of the...