With a 99-percent fall in motor vehicle production for the past 60 days, April was considered to be the worst month in history for the Brazilian auto industry, according to manufacturers. With only 1,800 vehicles produced in April, Brazil also recorded a drop of 99.4 percent in production in comparison to April 2019. Throughout Q1 2020, overall production has fallen by 39.4 percent.
As one of the main Mercosur sectors, the industry represents 50 percent of all Argentina’s purchases from Brazil, generating a USD 2.7-billion profit for Brazil in 2018. With an incredible drop of 100 percent in production in the neighboring country in April, demand for Brazilian automotive products has also fallen. The collapse of production happens during a moment in which Brazil-Argentina relations have cooled off — with Argentina announcing it is taking a step back from Mercosur trade talks during the pandemic.
Established by President Juscelino Kubitschek in 1957, Brazil has the second-largest automotive industry in Latin America, after Mexico.