(Adds details on production and sales numbers, context)
SAO PAULO, Oct 6 (Reuters) - Brazil's battered auto industry took another hit in September as scarce credit and dismal consumer confidence kept buyers from showrooms and led manufacturers to widen projections for the full year to a 27.4 percent drop in sales.
Automobile production fell 19.5 percent and sales dropped 3.5 percent in September from August, the national automakers' association said on Tuesday.
Automakers in Brazil produced about 174,200 new cars and trucks last month, while sales totaled around 200,100 vehicles, according to Anfavea, the industry group. Compared with a year ago, auto output plunged 42.1 percent and sales dropped 32.5 percent.
Anfavea also revised its forecasts for sales and production in 2015.
This year's sales are expected to decline 27.4 percent from 2014, compared with an earlier forecast for a 20.6 percent decline. Production is now expected to fall 23.2 percent, down from a previous forecast for a 17.8 percent drop.
Anfavea head Luiz Moan said last week that Brazil's auto sector is not expected to grow again until the last quarter of 2016.
The troubles in Brazil's auto industry reflect the range of woes afflicting the broader economy, currently in its worst recession in a quarter century.
Rising unemployment and record-low consumer confidence have left many Brazilians unwilling to make major purchases.
Meanwhile, austerity efforts have led the government to cut back costly tax incentives that stimulated car sales in recent years, and the resulting price increases have added to the sharp downturn.
Defaults on auto loans in Brazil are likely to rise in coming months, the head of national dealership association Fenabrave told journalists last month.
Brazil is one of the world's five biggest auto markets and a major base of operations for Fiat Chrysler Automobiles NV , Volkswagen AG, General Motors Co and Ford Motor Co. (Reporting by Alberto Alerigi Jr.; Writing by Asher Levine; Editing by W Simon)