Special Report:Global Financial Crisis
RIO DE JANEIRO, Nov. 11 (Chinese media) -- Governor of Brazil's Sao Paulo State
Jose Serra announced on Tuesday a four billion reais (1.8 billion U.S. dollars)
credit line for the auto industry to help it counter the global financial
crisis.
The money will be provided by state-owned bank Nossa Caixa. Theauto
companies will have 18 months to pay their loans.
With the extra credit, automakers will be able to pay less interest rates
and offer long-term purchase plans.
Last week, Brazil's federal government announced a 4 billion reais (1.8
billion dollars) aid to the auto industry.
According to the Brazilian National Association of Manufacturers (Anfavea),
the credit is essential to the development of the auto industry, as 70 percent
of all auto sales in Brazil are financed.
Before the international financial crisis, the Brazilian auto industry was
in a good situation: Brazilians could pay for a car in installments extended up
to 72 months, and sales hit several consecutive record-high figures.
In October, due to the impact of the world financial crisis, car sales fell
11 percent compared to September, and 2.1 percent compared to October 2007.
Several automakers have been forced to reduce their production because of
the reduction in demand.
The trend is not exclusive to Brazil: all major automakers around the
world are suffering the impact of the financial crisis,and several
registered substantial losses in the third quarter of 2008.
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