Brazil’s automotive October output up over 8% on healthy domestic sales, recovery in exports

SAO PAULO (ICIS)–Brazil’s petrochemicals-intensive automotive sector posted in October its best sales since 2014 at nearly 265,000 units, the country’s trade group Anfavea said on Wednesday.

Healthy sales at home propped up output, which stood at nearly 250,000 units during October and was also propped by overseas sales, with exports rising during the month, compared with September.

Year-to-date in October, however, exports still register a negative reading of more than 7%, when compared with the same 10-month period of 2023, as key trading partners such as Argentina remain in financial trouble, reducing consumers’ purchases of Brazilian-manufactured vehicles.

“Although this was the second-best month of the year in terms of production, we are still below the registrations, due to the high volume of imports,” said Anfavea’s president, Marcio de Lima, focusing on an issue – imports from China, specifically – which the trade group have been raising alarms for much of this year.

In July, Anfavea said several producers with facilities in Brazil – most of them the traditional, established players – are pointing to an “uncontrolled” influx of cars manufactured overseas which are hitting domestic producers’ market share.

China-produced vehicles, most of them electric or hybrid, are quickly gaining market share in Brazil and elsewhere in Latin America. Anfavea called on the government to establish tariffs as other jurisdictions – the US or the EU – have done on China-manufactured vehicles.

“Another good news in October was the increase of 7,000 direct jobs in the last 12 months, with the potential to generate another 70,000 jobs in the automotive chain. This is the indicator that makes us happiest, as we have great responsibility for the approximately 1.2 million workers in the automotive sector,” said De Lima.

Brazil automotive	October	September	Change	January-October 2024	January-October 2023	Change
Production	249,200	230,000	8.3%	2,123,400	1,950,600	8.9%
Sales	264,900	236,300	12.1%	2,124,000	1,847,500	15%
Exports	43,500	41,600	4.6%	327,800	354,200	-7.4%

The automotive industry is a major global consumer of petrochemicals, which make up more than one-third of the raw material costs of an average vehicle.

The automotive sector drives demand for chemicals such as polypropylene (PP), along with nylon, polystyrene (PS), styrene butadiene rubber (SBR), polyurethane (PU), methyl methacrylate (MMA) and polymethyl methacrylate (PMMA).