Brazil’s car dealers’ association, Fenabrave, raised its sales forecast for this year after data showed that government tax breaks helped spur record sales in August. Sales are expected to rise 8.05% in 2012 to 3.7 million vehicles. Sales in August surged 28.3 percent from the year earlier. Due to the car industry making up for more that 20% of Brazil’s manufacturing sector, a rise in the car output helped Brazilian industrial output post a modest gain for the second straight month in August. Fiat held on to the top spot in Brazil’s auto market in August, with sales of 98,200 cars and light trucks and a market share of 24.2 percent. Volkswagen followed in second place with sales of 88,760 vehicles and a market share of 21.9 percent. General Motors was third with 75,860 vehicles sold and a market share of 18.7 percent, while Ford tallied 31,000 sales and a market share of 7.7 percent.
The expectation in the increase of car sales for this year means that the middle class is rising, and the expansion is prevalent in this case. With the growth, more jobs are being provided which constitutes to the car sales. Although there are cut backs in different regions and concerns of recession, the vehicle consumption in Brazil shows that the development is still there and the consumption is strong. Investors should still look at Emerging Markets as an opportunity to achieve long-term goals of growth and retirement.
Our Excel Latin America Fund seeks long-term growth through capital appreciation by investing primarily in the equity securities of companies based in Brazil, Mexico and Chile, as well as others. 60.8% of our countries allocation for the LA fund is Brazil which makes this article and the car sales beneficial to our clients investing in this fund. As we can see the consumption is still very strong.