(Adds industrial production figures)
By Alberto Alerigi and Brad Haynes
SAO PAULO, Jan 8 (Reuters) - Automobile production in 2015 in Brazil will likely barely recover from a sharp plunge last year, as weak sales and exports drag on an industry quickly shedding jobs.
Anfavea, the national automakers association, on Thursday forecast a 4.1 percent rise in vehicle output this year after a 15.3 percent drop in 2014 due to tighter credit, shaky consumer confidence and expiring tax breaks. Output rose 10 percent in 2013.
Anfavea expects flat sales in 2015 after a 7.1 percent slump last year and sees exports edging up just 1.0 percent after a 33.1 percent plunge in 2014.
Brazil is one of the world’s five biggest auto markets and a major base of operations for Fiat Chrysler Automobiles , Germany’s Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co.
The prospect of another weak year for Brazil’s auto industry is adding to headaches for President Dilma Rousseff as she struggles to get Brazil’s economy growing again without the fiscal stimulus used in recent years.
Rousseff had offered cheap credit and tax breaks to protect manufacturing jobs and prop up the industry since 2012, but slumping demand and deteriorating government accounts have caught up with the president, who finally axed the incentives.
Payrolls in the sector dwindled 8.9 percent last year, and Volkswagen and the Mercedes-Benz truck unit of Daimler AG have cut more than 1,000 jobs in Brazil over the past week.
The layoffs threaten to lift Brazil’s unemployment rate from near record lows, undermining one of the few bright spots in an economy that has posted mediocre expansion for three straight years but kept families’ paychecks growing.
Carmakers anchor demand for Brazilian steelmakers and a vast auto parts sector, and their struggles have hurt the country’s manufacturing output. Industrial production fell 5.8 percent in November from a year earlier, statistics agency IBGE said on Thursday.
Anfavea President Luiz Moan said brands with domestic operations hoped a weaker Brazilian currency would reduce the appeal of imported cars, allowing local factories to lift production in a flat market.
Brazil’s car dealers had a more somber outlook, forecasting on Tuesday that sales would slip 0.5 percent in 2015, dropping for the third straight year.
Year-end holidays triggered a 23.1 percent drop in output in December from November, while expiring incentives boosted sales by 25.6 percent in the month. (Editing by Chizu Nomiyama, Jeffrey Benkoe and Meredith Mazzilli)