Agência Brasil

São Paulo - Last month was the best February ever for the automobile industry in vehicle production and export sales. According to the National Automobile Manufacturers' Association (ANFAVEA), the country produced 201,889 vehicles in February, 3.3% more than in January and 3.9% more than in February, 2005.

Production so far this year amounts to 397.3 thousand units, 10.7% more than in the first two months of last year.

Vehicle and agricultural machinery exports rose 14.6% overall in January and February in relation to January and February of 2005: 19.3% in the January-to-January comparison and 12.9% in the February-to-February comparison. Foreign sales brought in US$ 882.7 million in revenues.

Despite the good results, ANFAVEA president Rogélio Golfarb observed that "there is a clear slowing trend in the pace of exports." He was referring to the impact of the decline in the exchange rate of the dollar in relation to the real. "Exchange rate pressure is beginning to sap the vitality of the sector," he complained.

The data released by the ANFAVEA yesterday (6) show that the domestic market remains strong, although it was down 3.8% in comparison with January. The number of newly licensed domestic and imported vehicles totaled 127,881 units, 17.7% more than in February, 2005. This figure is up 11.3% so far this year.

In Golfarb's view, if expectations for a drop in the benchmark interest rate (Selic) are confirmed, "this can have a positive impact on domestic sales." He also informed that the share of flex-fuel (gasoline and alcohol) vehicles in domestic sales rose from 73% to 77%..

Translation: David Silberstein