UPDATE 1-Brazil automakers see market stabilizing at decade-low

miércoles 6 de julio de 2016 18:22 GYT

(Adds outlook for rebound, market share details)

By Alberto Alerigi Jr. and Brad Haynes

SAO PAULO, July 6 (Reuters) - Brazil's car market shows signs of stabilizing after a brutal contraction, which drove sales to the lowest level in a decade during the first half of the year, the national automakers association said on Wednesday.

Auto production fell just 3 percent in June from a year earlier, industry group Anfavea reported, compared to a 30 percent drop around the start of the year. Output rose 4 percent in June from May and sales increased nearly 3 percent.

"It seems the market hit bottom, which is positive because that means we should see the start of a recovery around the end of the year, gathering strength beginning next year," Anfavea President Antonio Megale told journalists.

That would end the worst crisis ever for Brazil's beleaguered auto sector, which makes up about a fifth of national industrial output and has seen auto sales cut nearly in half compared to a 2012 peak, when Brazil was briefly the world's fourth-largest market.

Weak consumer confidence and towering interest rates still weigh on demand, however, and few economists expect a swift rebound from Brazil's worst economic crisis in generations.

Anfavea slashed 2016 forecasts last month to a 19 percent drop in auto sales and a 5.5 percent decline in output.

All of the global carmakers in Brazil have been battered as a result of the economic crisis but those with the longest track record in the country -- Fiat Chrysler Automobiles NV, Volkswagen AG, General Motors Co and Ford Motor Co, have been hit the hardest.   Continuación...