Brazil’s auto sector revisited: Fasten your seatbelts

Overview

Brazil’s auto industry is headed for its second year of buoyant performance, despite growing inflationary pressures and a strengthening local currency. Fuelled by cheap ethanol prices and ample credit, domestic car sales in the first five months of 2008 accelerated to 30.2 per cent year on year. Brazil’s National Automakers’ Association recently revised its 2008 domestic sales growth projection from 17.5 per cent to 24.2 per cent year on year.

Inflation threatens this picture by...