Production falls, but stock cars climb

Although they have adjusted the production with measures such as layoffs and expulsion of workers from the Assembly lines for most of the year, the vehicle industry reaches the HomeStretch of 2014 with inventories still high. Data released yesterday by Anfavea, the entity that represents automakers in Brazil, reveal that the stranding in the courtyards of factories and dealers reached 414.3 million vehicles, the industry volume takes 42 days to sell.
Inventories increased from 900 vehicles last month, showing that despite the stoppages in factories and heating consumption in November, automakers ' production-supplemented by imports-follows without being fully absorbed by the market. At the end of October, the stockpile was turning in 40 days. The goal of the industry is to reduce this to the range of 30 to 35 days, a level considered more financially healthy companies.
As I said yesterday the President of Anfavea, Luiz Moan, the industry continues to operate with two variables-sales and production – to adjust the volume of vehicles stopped in the courtyards. On the other hand, automakers will give this month year-end vacation longer, for periods, in certain cases, even four or five weeks. On the other hand, play the chips in promotions and bet on a race from consumers at dealerships before the possibility of withdrawal of rebates in the tax on industrialized products (IPI) of cars at the turn of the year.
If the strategy works, the industry normalises their stocks and gains provided to reduce idleness in factories in 2015. Otherwise, the production will go down at the start of the year, but, at least, the sector will have a stock of transition to face the high of IPI. This year, for example, January was the month with the highest volume sold-312.6 million vehicles because, at the time, the market still had available cars in stock with IPI reduced.
Backstage, the Anfavea still "fight" for maintaining the current tax rebates, although, officially, its leaders express the hope that the Government will charge the full rates of IPI in January. The theme must still be discussed with the economic team nominated for the second term of President Dilma Rousseff.
Yesterday, Moan said the IPI full back can lead to an increase of 4.5% in the price of the popular car, the 1.0 engine, whose rate could rise from 3% to 7%. At the same time that alert the plateau on the impact of the measure, the message induces consumers to go to the shops before price increases, aligning thus the interests of a strong December to minimize poor performance in the year.
In the accounts of the Anfavea, if the market can repeat this month the result of December 2013-when consumers lived too high expectancy on IPI-the decline of vehicle sales in the year-end result drops to 7.6%, softening a negative percentage was at 8.4% at the end of November and reached 9.7 percent in the accumulated until August.
According to him, the biggest challenge for 2015 will keep throughout the year, the pace of sales in the second half of 2014, which would allow the resumption of growth. If the repeat the monthly average of plates issued since the beginning of July, 2015 could surpass 3.5 million vehicles sold, said. In 2014, the market walks to close slightly above the 3.4 million units.
The President of Anfavea said that banks began this week, to adapt to the new funding contracts law of chattel mortgage, which streamlines the resumption of automobiles by financial institutions in case of default. This is expected to improve the willingness of banks to release loans for purchase of cars. "Banks began to administer credit agreements based on new legislation. With the new standardization of contracts, we expect the rule of selectivity [banking] download, "said the Executive.
Balance sheet released by Anfavea shows that in November, the production of automakers fell 9.7% in comparison with the same period in 2013 as compared to October. Already the consumption of vehicles in the country last month, ceded 2.7% compared to the previous year.