Brazil auto sales plunge in January, worsening crisis

lunes 2 de febrero de 2015 19:20 GYT

SAO PAULO Feb 2 (Reuters) - Automobile sales in Brazil fell nearly 19 percent in January from a year earlier, dealership association Fenabrave said on Monday, adding to concerns of unused capacity and more layoffs at the country's car factories.

Fenabrave said registrations of new cars, trucks and buses, which typically start the year slowly, fell 31 percent from December to 253,800 vehicles, the weakest January since 2011.

The January drop was worsened by a December rush at dealerships, where consumers scrambled to buy vehicles before the end of tax incentives this year.

Still, rising interest rates and weak consumer confidence point to slumping demand for the rest of 2015, leading Fenabrave to forecast a drop in auto sales for the third straight year.

The meager outlook and high inventories in Brazil have fed labor tensions, as automakers try to trim payrolls at local factories. Workers carried out a 10-day strike at a Volkswagen AG plant near Sao Paulo last month, until the company reversed layoffs of 800 employees.

Brazil is a major market for global carmakers with local operations such as Volkswagen, Fiat Chrysler Automobiles , General Motors Co and Ford Motor Co.

Fiat remained Brazil's top seller of cars and light trucks in January with almost 49,700 new registrations. GM was a close second, selling nearly 46,900 passenger vehicles. VW sales slipped to about 39,500 cars and light trucks, while Ford sold around 24,900 vehicles. (Reporting by Alberto Alerigi Jr. and Brad Haynes; Editing by Cynthia Osterman)