Auto Sales Drop 11% in Brazil

Automakers sold 257,900 cars, trucks and buses in Brazil last month compared with 289,700 units in April 2011, according to dealer group Fenabrave.

Tight credit is a major cause of the sales slump, Fenabrave says. It tells Dow Jones Newswires that Brazil's banks, which made risky auto loans several years ago, have reacted to rising default rates by clamping down on new auto loans. About 70% of vehicle purchases in Brazil are financed, the news service says.

Fenabrave has lowered its 2012 outlook for Brazil's auto market to an increase of 4% from its previous forecast of 5% growth.