Brazil auto sales seen accelerating
The Brazilian auto industry is expected to post a double-digit sales expansion in the coming years as the economy is gradually recovering.
"In 2018, we forecast growth of 13.7% in new commercial vehicle sales in Brazil, reaching a total of 442,379 units by year end. Breaking this down, we expect to see an 11.0% rise in light commercial vehicle sales and a 22.2% rise in heavy truck sales," said BMI Research. In the 2018-2021 forecast period, BMI Research sees commercial vehicles sales posting average annual growth of 12.5%, with light vehicles averaging 10.4% and heavy trucks 22.5%.
This recovery is highly positive for Brazil's insurance industry since auto insurance is one of the biggest lines of business for many insurers.
Sales of passenger cars, light commercial vehicles, trucks and buses rose 9.3% year-on-year in January-October to 1.82mn units, according to automakers' association Anfavea.
After contracting 3.5% in 2015 and 3.6% in 2016, Brazil's economy is expected to expand 0.7% this year and around 2.5% next year, according to local economists.
"In 2018, businesses are set to begin increasing capital expenditure after declines in investment during the 2014-2016-period and a stagnation during 2017," said BMI Research.
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