Brazilian auto makers on Monday appealed to Finance Minister Guido Mantega to help pursuade the nation's banks to loosen up a tight market for auto loans, the government said through its official news agency, Agencia Brasil.
Cledorvino Belini, president of the National Motor Vehicle Manufacturers Association, or Anfavea, met with Mantega Monday afternoon. The government news agency said Belini argued for looser consumer credit in order to spur motor vehicle sales.
Mantega offered no immediate response to Anfavea's appeal, according to the news agency.
Brazilian banks in recent months have tightened up on consumer qualifications for auto loans in the face of a rising default rate. Defaults reached 5.7% of all loans in March, up from 5.5% in February, hitting the highest level in over three years, according to data released earlier Monday by the National Association of Auto Financing Institutions.
Historically, about 70% of Brazilian auto sales are made through installment buying.
Earlier this month, Flavio Meneghetti, president of the nation's auto-dealers association, said, "Banks opened up the taps too much before and now they're closing them too much."
Figures for April motor vehicle sales, released last week by Anfavea, were a major disappointment for the industry. April sales were down 10.8% from the same month in 2011 at 257,885. Anfavea executives blamed the tight credit market for the decline in sales.
-By Tom Murphy, Dow Jones Newswires; 55-11-3544-7090; email@example.com