Car Demand Soars 22% in Brazil

Sales of light vehicles in Brazil set a July record of 351,400 vehicles last month compared with 287,900 units in July 2011, according to dealer group Fenabrave.

June sales, which jumped 19% to 340,700 vehicles, also hit a record for that month. The organization attributes the two-month surge to the industrial tax breaks and auto lending incentives to banks that were launched at the end of May.

Demand for passenger cars jumped 26% year over year to 280,300 units in July. Light-truck volume rose 9% to 71,100 units. But sales of heavy-duty trucks and buses plunged 31% to 10,700 units and 26% to 2,000 units, respectively.

The tax incentives, which benefit such companies as Fiat, Ford, General Motors and Volkswagen, are scheduled to expire on Aug. 31. The government says it is not currently considering an extension of the program. Analysts say it will take growth in consumer income to sustain strong auto demand.