Brazil’s Car Sales Drop 9%

Automakers sold 274,500 new passenger and light commercial vehicles in Brazil last month compared with 300,500 units in May 2011, according to dealer group Fenabrave.

Tight credit has dampened auto demand in Brazil, where about 70% of vehicle purchases are financed.

In late May, the Brazilian government lowered vehicle taxes levied on automakers and car buyers through August. At the same time, the central bank said it would ease reserve requirements for banks to allow them to make more car loans. Analysts say it is too early to tell whether the programs will boost sales.