General Motors' Brazil Car Sales Seen Lower For Feb-Source
28 February 2009 - 3:11AM
Dow Jones News
General Motors Corp. (GM) will likely sell fewer cars in
February in Brazil, putting an end to a two-month sales rally, a
source within the company said.
General Motors do Brasil Ltda., the local subsidiary of the
ailing Detroit automaker, sold 38,157 vehicles in January. In
February, with just Friday and Saturday left to complete the month,
GM sold around 30,000 vehicles, the source told Dow Jones Newswires
late Thursday.
GM recently put 900 staff employees on paid leave for a month
starting Thursday due to a number of unsold vehicles still sitting
at assembly plant lots.
The company also declined to renew contracts with 1,633
temporary workers recently.
Car sales rose slightly in December and again in January for
Brazil's "Big Three" automakers -- GM, Volkswagen AG (VOW.XE) and
Fiat SpA (FI.MI) -- thanks to a temporary tax break. The industrial
IPI tax cut ends on March 31. So far, it has reduced sticker prices
of new cars by as much as 7.4%. But with layoffs across various
sectors and unemployment now over 8%, locals are holding back from
buying costly items.
Banks have also shortened their lending terms for new car
financing and have raised interest rates. Defaults on car loans
rose to 4.7% of all car loans in circulation in January, a
record.
Volkswagen declined to comment on February sales.
Fiat was unavailable for immediate comment.
Industry association Anfavea will release its monthly sales
numbers for February on March 9.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541,
kenneth.rapoza@dowjones.com