Car sales in Brazil drop sharply during the first semester

Vehicle sales in Brazil dropped 14.53 percent between January and June, compared to the same period last year, as automakers continue to grapple with supply chain issues and the country’s overall economic woes impact consumer spending. The number of new licensed vehicles decreased to almost 918,000 in the first semester, according to new data from industry association Fenabrave.

Car sales account for 75 percent of the vehicle market and were the worst-performing segment among all vehicle sales in the first half of the year.

The auto industry is feeling the pinch of the semiconductor shortage, which has disrupted manufacturing since the start of the pandemic. Factories expected the supply to be back to normal by the second half of this year, but the war in Ukraine and the recent Covid lockdowns imposed in China have created new logistical hurdles. 

Moreover, double-digit inflation and rising interest rates have forced many Brazilians to hold off on buying a new car. Fenabrave has updated its estimates for the year. In January, the association projected 4.6-percent growth. Now, reaching 2021 numbers would be considered a win.

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