Brazil auto sales slump 27.4% in January

New automobile sales in Brazil slumped 27.4 percent in January from a strong showing in December and record sales in 2009, a source with access to the data told Reuters on Monday.

Sales surged about 6.3 percent over the year-earlier period, the source added, as government tax breaks for the sector continued to buoy demand.

In January, 201,800 automobiles were sold, compared with 277,900 in December and 189,900 in January 2009.

Automakers benefited last year from government tax breaks that helped boost demand when the economy was struggling.

But Finance Minister Guido Mantega has said the government has no plans to renew the tax breaks, which expire at the end of March.

Still, Brazil's automakers association Anfavea expects sales to jump 8.2 percent in 2010 to 3.4 million vehicles, including buses and trucks.

In December, automobile sales in Brazil had increased 16.41 percent from November, the nation's automobile dealers association known as Fenabrave said last month.

Brazil is a major market for global automakers such as Italy's Fiat SpA, Germany's Volkswagen AG, and U.S.-based General Motors Co GM.UL and Ford Motor Co.