Brazil Extends Auto Tax Break Through October

The Brazilian government has unveiled an array of measures to spur domestic consumption and investment, include a two-month extension of an industrial tax break for automakers that was scheduled to expire on Friday.

State development bank BNDES also will continue to offer reduced-rate loans for the purchase of trucks, machinery and other capital goods.

Brazil lowered those taxes in May, which benefited such carmakers as Fiat, Ford, General Motors, Renault and Volkswagen. At the same time, the central bank eased reserve requirements for banks to encourage them to make more vehicle loans.

The country's auto sales in April had fallen 11% year over year to 257,000 vehicles in April, according to local trade group ANFAVEA. With the new programs in place, demand surged 19% to 340,700 units in June and 22% to 351,400 units in July record-high levels for both months.