Ford Expects Brazilian Markets to Set New Record
Because the government has taken measures that satisfy automakers, Ford Motor Co. hopes that the Brazilian auto market will deliver a new sales record in the second half of 2012. The company had a sluggish start and as the government offered tax breaks and record-low interest rates, Ford wants to double the sales in the second half. According to Rogerio Golfarb — Ford’s head of corporate affairs in South America, Ford is all set to see a really strong pickup in the second half of the year due to government measures. He dismissed concerns that the sales drop of 5 percent through May will continue into the rest of the year. He added that this year, there is going to be growth.
Since 2005, the sales have been rising amidst recent economic boom, and in the first quarter of this year, Brazil’s car industry struggled alongside Latin America’s biggest economy. To meet the demands of the consumers, Brazil’s government recently reduced taxes on select products, including cars, and also encouraged the central bank to lower interest rates to historic lows. Despite assurance from Golfarb, analysts are second-guessing and they fear the No. 5 automaker in the world is going to see a shrink for the first time in nearly a decade. Meanwhile, the carmakers in Brazil responded the decline by cutting production 10 percent in the first five months of the year. The government introduced an aggressive industry tax cut when the companies started giving short-term furlough and voluntary buyouts for workers.
According to Golfarb, the middle class in Brazil knows how to finger unprecedented access to credit. He added that despite sluggish growth in recent years, the car markets in Brazil should pursue growing faster than the country’s economy. It is just because the ongoing jeopardy may pave the way for the rivals to open factories in Brazil that would tap one of the world’s few healthy major markets.
“The race for market share in a world that’s not growing could lead to overproduction. Our concern is to avoid that,” said Golfarb. Ford was the very first automaker in Brazil and keeps the fourth place through these years despite tough competition from rivals. However, the company hopes to maintain its position.