IHS Markit foresees reduced growth in Brazil and retraction in Argentina

IHS Markit expects 5.6% growth in light vehicle sales in Brazil and 25% reduction in Argentina

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Reduced growth in BrazilPortuguese version

Reduced growth in Brazil

With the closing of the vehicle market figures for 2019, the consultancy IHS Markit is expecting, for the period 2020/21, a moderate growth of the Brazilian light vehicle market. On the other hand, for the same period, the company expects a strong retraction of the Argentine market in 2020 and only a resumption in 2021, however, returning to the 2019 sales.

In its monthly projection published regularly by automotive Business, IHS Markit estimates the sale of 2.82 million cars and light commercial vehicles in Brazil in 2020, which represents a growth of 5.6% over the previous year. This number is lower than that projected by Anfavea, representative of the automakers, and Fenabrave, representative of the distributors, who project a growth of 9% for the market in 2020.

The consultancy’s SAAR (Seasonally Adjusted Annual Rate) index, which calculates the annualized volume of sales of light vehicles in Brazil based on the seasonally adjusted monthly result, already pointed in December to an annual market of 2.83 million units for 2020 , in line with the consultancy’s projections.

As a result of the reduction in exports to the Argentine market, the production of light vehicles in Brazil should continue, in 2020, evolving with reduced growth. For 2021, the expectation is for a new growth of approximately 4.8%, corresponding to a volume just over 3 million units.

Argentina

Argentina has already accumulated two years of deep crisis in the car market and IHS Markit projects an even worse horizon for 2020. The consultancy estimates a sale of only 335,800 cars and light utility vehicles, which represents a 25% drop compared to the year 2019. For IHS, 2021, it will show a small recovery around 13.4% growth reaching a volume of 380.8 thousand units. Well below the 444,600 units sold in 2019.

Regarding the production of automobiles in the country, IHS sees a positive scenario for the next two years, with increases of 11.5% and 24.5% respectively. But still with a lot of idle capacity for the sector.