Ford Anticipates Low Sales Increase for Ford Cars in Brazil Next Year

Ford Motor Company anticipates a reduction in the speed of auto sales’ development in Brazil next year. This speculation came about even after the rapid increase in auto demands this year, which was primarily a result of the improvements in credit provisions.

According to Ford Mercosur and Brazilian division President Marcos de Oliveira, the automotive corporation estimated an auto sales raise as low as 10 percent for 2008. Brazil is one of the biggest markets of Ford, corresponding to about 60 percent of the company’s sales in South America.

Brazil, which owns the largest economy in South America, experienced an upsurge in demands for new vehicles early this year. This intense growth was an off-shoot of this years’ increased duration of loans and the minimal interest rates. Since last year, automobile manufacturers have raised vehicle credit maturities from 36 months to 84 months. On the other hand, spreading out the terms of loans takes down monthly fees.

Analysis of the given condition of auto sales and credit conditions shows that the auto sales boom is not easy to uphold. During the second quarter, the returns of Ford South America climbed to $1.8 billion, which is around four percent of the sum profit. However, De Oliveira said that the growth this year is impressive, yet the company believes that it is not sustainable.

As stated by the data of the Brazilian Automakers Association, the transactions of Ford passenger vehicles in Brazil have soared by 39 percent in the first half of the year. This proportion represents more than 80,000 Ford units. Despite this amplified figures, Ford still likely thinks that, with other factors existing, it will be difficult to sustain a huge percent of sales increase. In view of this, the company is keeping their hopes near to the ground. It is now focusing on investments that can help elevate the estimated percent of sales raise.

Ford Motor Company is planning to produce a new model in Sao Bernardo do Campo, Brazil next year. For this new endeavor, $154 million or 300 million reais will be needed, and the company is now ardently investing on it. Moreover, Ford is putting in $160 million to manufacture two new vehicles to be release in Argentina by 2008 and 2009.