São Paulo, July 8, 2004 (Agência Brasil) - Exchange stability and the reactivation of the international economy enabled the exports of the automobile industry to set a new record in June: US$ 699.7 million (R$ 2.12 billion) in foreign sales. This figure, released on Tuesday (6) by the National Association of Motor Vehicle Manufacturers (Anfavea), helped close the first half of the year with a 53.1% increase in exports, compared with the first half of 2003, well above Anfavea's expectations.

Though on a more modest scale, domestic sales also maintained their upward trend. 130.7 thousand passenger vehicles were sold in June, 6.2% more than in May. Cumulative growth in the first half of the year amounted to 11.4%, compared with the same period last year. These results led the automobile industry to open 1,172 new job posts in June.

"The economic stability that sprang from an effort by society and the government is producing this growth. In the 18 months that Lula has been in office, the economic parameters were stabilized, creating a growth setting that materialized in a 2.7% increase in the GDP in the first quarter," assesses Anfavea president, Rogelio Golfarb.

According to Anfavea, the only segment which performed negatively in June was domestic sales of agricultural machinery, down 3.3% in relation to May and 15.7% when compared with the same period last year. Nevertheless, the balance for the semester remains positive: 18,797 agricultural vehicles were sold between January and June, as against 18,357 units sold during the first half of 2003.

With the results for June, Anfavea's estimates for domestic market growth in 2004 remained unchanged: a 7.8% rise in sales of passenger vehicles and a 5.3% boost in the agricultural machinery segment.

Although the United States continues to be the principal destination of automobile exports, including auto parts, the results in the first semester were basically driven by the rekindling of economic activity in Argentina and the Andean group, the Anfavea president informs.

Between January and May, sales to Argentina increased 150%, to US$ 1.19 billion (R$ 3.61 billion). Exports to members of the Andean group grew 121%, to US$ 371 million (R$ 1.12 billion). The United States imported US$ 1.49 billion (R$ 4.51 billion), 4.5% more than during the same period last year, and Mexico, the second most important export market for the Brazilian automobile industry, imported US$ 688 million (R$ 2.08 billion), 17.9% more than last year between January and May.

Translator: David Silberstein