UPDATE 2-Brazil vehicle exports seen rising as local market cools
SAO PAULO, Aug 6 (Reuters) - The pace of vehicle production in Brazil slipped in July to the lowest daily rate in five months as factories, facing sagging consumer confidence, scaled back output, industry data showed on Tuesday.
Anfavea, the national automakers association, said automobile production in Brazil fell 2.7 percent from June, even though July had three additional work days. Factories produced about 13,600 cars a day, the lowest rate since February.
Exports rose 2.4 percent from June, Anfavea said. It revised its 2013 export growth forecast to 20 percent, up from a prior estimate for a 4.6 percent decline.
Brazil's currency, the real, has weakened over 10 percent so far this year as global investors lose confidence in a sustained recovery in Latin America's largest economy. While the drop has made Brazilian exports cheaper, the recent improvement in car exports was mainly due to the better health of other economies.
"The performance of our exports reflects an improvement overseas, not that we are more competitive by ourselves," said Anfavea President Luiz Yabiku Jr.
Disappointing economic growth, fading consumer confidence and rising borrowing costs are dampening demand for cars in Brazil.
Sales rose 7.4 percent in July from June but dealerships sold less than 15,000 vehicles per day in July for the first time since March. The daily production rate had outpaced sales for four months, driving up inventories.
Still, the industry expects to set a new annual sales record after President Dilma Rousseff extended tax breaks on locally made cars through the end of the year. Yabiku Jr. said he was confident sales and output would continue to grow next year, even if the tax breaks are not extended further.
Automakers produced 312,300 cars and trucks in July, while sales totaled 342,300 vehicles, according to data released by Anfavea. Auto output had slumped 8 percent while sales rose 1 percent in the previous month.
Several of the world's biggest carmakers have invested heavily in Brazilian factories, including Italy's Fiat SpA , Germany's Volkswagen AG, and U.S.-based General Motors Co and Ford Motor Co.
The four automakers account for more than 70 percent of sales in Brazil's car market.
Fiat remained Brazil's top seller of cars and light trucks in July, with 67,170 new registrations, or 21 percent of the market, according to data released last week. GM passed VW to take second place, selling 61,630 passenger vehicles, compared with the German automaker's 56,786 cars and light trucks. Ford sold 33,062 vehicles.