SAO PAULO, July 15 (Reuters) - Bank financing for car purchases in Brazil sank in the first six months of the year, Cetip SA Mercados Organizados said on Wednesday, as rising borrowing costs and unemployment contributed to a mounting crisis in the nation’s beleaguered auto industry.
Banks processed credit for the purchase of about 2.712 million cars, trucks and motorcycles in the period, down 10.6 percent from the same period a year earlier, Cetip said in a report. About 1.216 million credit requests were made to finance purchases of new vehicles, with the remainder for used vehicles, added Cetip, the nation’s top seller of car loan liens and registrations.
Sales of new vehicles in Brazil fell 18.5 percent in the first half of the year from the same period in 2014, according to national automakers’ association Anfavea, which expects the industry to face its worst downturn since 1998.
Brazil’s largest banks have reduced available lending for car buyers after a credit boom early in the decade led to soaring defaults and repossessions. Outstanding auto loans in Brazil’s banking system fell to 176 billion reais ($56 billion) in May from about 195 billion at the end of 2013, according to central bank data. ($1 = 3.1565 Brazilian reais) (Reporting by Guillermo Parra-Bernal; Editing by Jeffrey Benkoe)