* Auto output up 13 pct, sales rise 19 pct from September
* Extended tax cuts, more working days support industry
SAO PAULO, Nov 7 (Reuters) – Brazilian car production and sales recovered in October but remained below their August peak as a boost from temporary tax breaks continued to fade.
Automobile production in October rose 12.8 percent from September and sales increased 18.6 percent , the national automakers’ association Anfavea said on Wednesday.
In September, auto output fell 14.2 percent from August and sales contracted 31.4 percent.
Three additional workdays in October compared to September helped boost output. But average daily production slipped to 14,500 vehicles from 14,800 in September, according to Thomson Reuters calculations.
President Dilma Rousseff has targeted the auto industry with aggressive stimulus aimed at sparking a recovery in Latin America’s biggest economy. The industry makes up more than a fifth of Brazil’s manufacturing output, which has struggled with high costs and a weak global economy over the past year.
Even with the government incentives unveiled in May, which reduced the price of locally made cars by about 7 percent, daily auto sales and output in October barely rose from the same month in 2011.
Brazilian car dealership association Fenabrave cut its 2012 sales forecast on Tuesday to around 4 percent growth, halving its outlook from just two months earlier, when an August sales bonanza raised hopes for the world’s fourth-largest auto market.
Brazil is a key consumer and base of production for the world’s biggest automakers, including Italy’s Fiat SpA, Germany’s Volkswagen AG and U.S.-based General Motors Co and Ford Motor Co.
Automakers in Brazil produced about 318,700 new cars, trucks and buses last month, while sales totaled about 341,600 vehicles, according to data released by Anfavea.
Source: Reuters
