Brazil's Car Sales Decline in November Amid Broader Economic Concerns

November Sales Figures Reveal Market Contraction

Brazil's automotive market registered a significant downturn in November 2025, with approximately 238,600 new vehicles, including cars, light commercials, trucks, and buses, licensed during the month. This figure represents a 5.9% decrease compared to November of the previous year and an 8.5% drop from October 2025. For light vehicles specifically, sales reached 228,119 units, marking a 5.2% year-on-year fall. The overall registered vehicles for November stood at 227,174 units, an 8.35% decline from October.

Despite the overall monthly decline, daily average sales showed a nuanced picture. November had fewer working days than October, leading to lower total volumes. However, approximately 23,000 vehicles were sold per working day in November, an increase of 7.5% over October's daily average.

Economic Headwinds Impact Consumer Demand

The slowdown in car sales is largely attributed to persistent economic challenges facing Brazil. High interest rates, currently around 15% annually, have made car loans expensive and burdensome for private consumers, significantly impacting their ability to purchase new vehicles. Inflationary pressures and reduced disposable income further constrain consumer spending.

A notable shift in the market indicates that a substantial portion of sales now comprises 'direct sales' to rental companies and fleets, rather than individual buyers. In some segments, these institutional purchases account for more than half of all transactions. This trend allows factories to maintain production levels but suggests a weakening broad consumer base typically indicative of a strong middle class.

Year-to-Date Performance and Market Dynamics

For the year 2025 to date, total vehicle sales are only 1.4% higher than in 2024, falling short of the industry's initial growth projections of 2.6%. The year-to-date tally for light vehicles reached 2,283,818 units, marking a 2.1% increase and representing the highest volume at this point in the year since 2019.

In terms of market preferences, the Fiat Strada pickup continues to be a top seller, reflecting the importance of gig work and small businesses in the Brazilian economy. The VW Tera also performed strongly, securing the second best-selling vehicle position for the second consecutive month. The market has also seen rapid growth in electrified vehicles, including hybrids and battery cars, driven by the increasing presence of aggressive Chinese brands such as BYD and GWM, which now hold over 10% of the market share.

Outlook for the Automotive Sector

Industry analysts and consulting firms anticipate continued challenges for the Brazilian automotive market. While 2025 is expected to conclude with some growth, a consulting firm projects a potential 6% decline in new car sales in 2026, forecasting approximately 2.4 million units. Factors such as sustained high interest rates, limited credit availability, and a strong U.S. dollar, which increases the cost of imported components, are expected to continue impacting consumer purchasing power and overall market performance.