SAO PAULO, July 2 (Reuters) - Sales of cars and light trucks in Brazil are likely to fall 23 percent this year, dealership association Fenabrave said on Thursday, cutting its outlook for the third time this year as a sharp economic downturn rattles the local auto industry.
Climbing interest rates and crumbling consumer confidence have rapidly eroded the outlook for Brazilian auto sales since Fenabrave forecast 0.5 percent growth at the start of the year.
Last month, automakers association Anfavea forecast a 20.6 percent sales drop in 2015, the steepest since a 23.2 percent contraction in 1998.
The downturn in Brazil, one of the world’s five biggest car markets, has hurt results for global automakers in the country, including Fiat Chrysler Automobiles NV, Volkswagen AG , General Motors Co and Ford Motor Co.
The deteriorating outlook has led to mounting layoffs in the auto industry, which contributes a fifth of Brazil’s industrial output and over 120,000 coveted union jobs. Carmakers have cut payrolls by nearly 8 percent in the past 12 months. (Reporting by Alberto Alerigi Jr.; Editing by David Gregorio)