FILE PHOTO: Covered new cars are displayed during the Salao do Automovel International Auto Show in Sao Paulo, Brazil November 7, 2018. REUTERS/Paulo Whitaker/File Photo
SAO PAULO (Reuters) – Brazil’s auto industry production and sales dropped sharply in January from the previous month, data from automakers association Anfavea showed on Tuesday, suggesting sluggish demand for vehicles in Latin America’s largest economy.
According to Anfavea, auto production was down 20.3% in January from the previous month, totaling 152,666 units, while sales fell 34.1% in the period to 142,852 vehicles.
The monthly drops come despite signs that a component shortage that capped auto production in recent years had been improving, as mentioned by both Anfavea and Stellantis NV last month.
Anfeavea’s head Marcio de Lima Leite told reporters that “the sales decrease in January shows signs of demand slowing down”.
Brazil’s latest figures partially contrast with data coming from Latin American peer Mexico, which on Tuesday showed that auto production there jumped 17% in January. Monthly sales in Mexico also dropped, but by a shallower 21.8%.
Anfavea currently expects Brazil’s 2023 auto production to rise 2.2% and sales to increase 3% from last year.