Brazilian Automotive Market Up 15.5 Percent Over January

Brazilian automotive sales have risen for the second consecutive month, February figures showing a 15.5 percent increase over the last month. But when you are inclined to believe this is a good thing, you should know that as always, there are more than one side to the story in Samba Land.

The increase in sales is real and is supported by credit and tax relief. Averaging 10,000 units a day, the total number of cars sold this year could amount to 2.82 million units, as much as last year, just-auto.com reports. An extraordinary achievement, considering the economy is not at its greatest nowadays.

Associação Nacional dos Fabricantes de Veículos Automotores (ANFAVEA), however, appears to remain on the edge of the cliff, either way. If things go well and the market recovers, then it is likely they will be asked to say "goodbye" to the special treatment they are given by the Government until March. If things go south, ANFAVEA will have to ask for an extended tax reduction for another quarter.

If the latter of the two possibilities gains ground and the growth stops, it could mean stopping the decrease of the 31-day January stock. This simply means production at the closed plants will not resume.

French manufacturer Renault, which seems to be the all time champion of the economic crisis, is tackling the situation well in Brazil as well. The group has seen a 56.4 percent increase in sales during January. As a result, half of the 1,000 workers it had previously sent on compulsory paid vacations were recalled to working duty.