Automakers have half worse than expectations

At the turn of the year, executives and industry analysts recognize the difficulty of tracing predictions about the performance of the automobile industry in 2014, but, in General, the expectations pointed to a market close to 2013 volumes or, at worst, up 4% lower.
There was consensus that the automakers would have difficulties with the withdrawal of part of the discounts in the tax on industrialized products (IPI) in January, aggravated by the compulsory introduction of new safety devices in automobiles-putting more pressure on prices-and the continuity of a restrictive environment in the credit market.
The results of the first half, however, were worse than initial expectations more pessimistic. Vehicle sales fell 7.6 percent, while exports sagged more than 35%, a combination that led factories to cut production by almost 17%, while reducing the labor force with the Elimination of 5.5 thousand jobs since January.
Escaped initial forecast factors such as the worsening crisis in Argentina-fate of four out of five cars exported in Brazil-, the difficulties involving financing the trucks of the Banco Nacional de Desenvolvimento Econômico e Social (BNDES) and climbing inventories, which, in March, came to reach the most critical level since the financial crisis of 2008.
Set on Monday last week to IPI situation, whose rates remain low until the end of the year, the projections are now being updated to the new reality. The Anfavea, an organization that represents automakers in Brazil, changed expectations that suggested growth exceeding 1% of both sales as production. Now, the forecast drop of 5.4% of plates issued and 10% of production. Before the Anfavea, the Fenabrave, resales Association, had already announced projected fall of 8.1% of the market, including trucks and buses, this year.
Although negative, these estimates assume a second half better than the first, albeit in lower volumes in comparison with the same period last year. That is, the sector would already have arrived, or would be close to arrive at "rock bottom", thus opening the prospect of an early reaction.
In the calculations of Anfavea, sales in the second half will be more than 14% above the volumes recorded during the first six months of the year. Estimates of type hold up on seasonality-since the second half of the year is, historically, more heated-apart from the most favorable schedule. Without so many holidays and parades with the FIFA World Cup ™, the industry will have more days of sale. Also enter in the account possible anticipation of purchases in the last bimester, once the Government left the re-composition of the IPI for January.
This, however, does not change the factors that come crashing through the consumption of vehicles. The banks will not be more permissive in credit analysis-now with higher interest rates-as well as the consumer, more indebted and less confident in the direction of the economy, is little prone to switch cars. For executives of the trucking industry, uncertainties that are delaying investments in the fleet of commercial vehicles also must persist until the October elections.
After that, it is hoped the fiscal austerity measures beginning of term, when Governments tend to concentrate the most unpopular policies. This situation reinforces the analysis – shared by executives like Carlos Ghosn, President of Renault Nissan, and Jaime Ardila, Commander of the General Motors (GM) in the region-that the sector will follow in "neutral" until at least 2015.