Auto sales in Brazil rose 15.3 percent in August to a record high of 420,100 units, fueled by government stimulus measures, including tax cuts and greater access to credit, according to data released Thursday.
And compared to last year at the same time, August sales were up a whopping 28 percent, the National Association of Motor Vehicle Manufacturers (ANFAVEA) said.
Production last month reached 329,300 units, up 10.6 percent over July and one percent over August 2011, it noted.
"The reduction of the IPI (tax on industrialized products) has a multiplier effect in the economy," ANFAVEA President Cledorvino Belini told a press conference, adding that as a result of strong sales, inventories dropped to 19 days from 27 days the month before.
Sales of light domestically-produced vehicles reached 340,911 units in August, up 34.2 percent over the same month of 2011.
"We hope that the sales will continue at the same daily levels for the next two months with the cut in the IPI," Belini said.
The figures signaled an improved performance by the auto industry compared with the first half of this year when sales fell 1.2 percent and production shrank 9.4 percent in relation to the same period of 2011.
The uptick can be traced to government measures to bolster the flagging auto sector, analysts said, noting the sector represents more than 25 percent of the country's industrial GDP.
President Dilma Rousseff's government recently announced tax and interest cuts to boost consumption and credit. It also unveiled plans to spend $4 billion on purchases of domestic goods and equipment to revive the flagging economy.
Brazil's auto sales had a banner year in 2011, when auto sales reached 3.63 million units -- the fifth year in a row car and light vehicle sales set a record, according to ANFAVEA.
But the South American giant's GDP growth slumped to 2.7 percent in 2011 after expanding by 7.5 percent the previous year.