Economy & Business - August 2003

The motor industry is running at half speed. Motormen say that the industry is facing the worst crisis of the decade. The industry enjoyed foreign investment of US$27bn between 1994 and 2001, according to the Asociação Nacional dos Fabricantes de Veí­culos Automoveis (Anfavea). The president of Anfavea, Ricardo Carvalho, said that the industry was clearly now lossmaking. Carmakers have 170,000 cars sitting on forecourts or in factory carparks. This is a far cry from the heyday of the industry in 1997, when 2.2m vehicles were produced. Then the industry was forecasting domestic sales of 2.5m for this year and total production of 2.9m, thanks to a surge in exports. Exports are the only part of the projection that is holding up. Production for the domestic market this year will be about 1.3m units. Exports will be between 400,000 and 500,000 units. The installed capacity is 3.2m units.

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