June 5, 2012 / 7:47 PM / 5 years ago

Brazil car dealers see June sales best in 6 months

* Dealer group sees car, light truck sales at 13,500 per day

* Daily sales averaged 12,500 in May, below 13,000 this year

* Fenabrave dealer association confirms weak May recovery

* Fiat holds on to top sales spot, GM surges to No.2

SAO PAULO, June 5 (Reuters) - Car dealers in Brazil expect sales in June to pick up to the fastest pace of the year, an industry group said on Tuesday, building on a weak May recovery as the local auto industry tries to clear out the highest inventories in nearly four years.

Sales of cars and light trucks this month should accelerate to 13,500 per day from around 12,500 in May, dealership group Fenabrave told reporters in Sao Paulo. That would represent the highest daily demand registered this year.

Daily sales volumes have sagged below 13,000 in 2012, down 5 to 10 percent from a year earlier as Brazilians rebalance record household debt levels and banks tighten lending standards in the face of rising consumer defaults.

The outlook may provide some relief for struggling local carmakers, which began idling production lines and laying off workers after stagnant exports and weak local demand pushed inventories in April to their highest since November 2008.

The government has responded with repeated rounds of tax incentives and trade protection for local auto factories, along with lower interest rates to bolster demand, which has shown few signs of a sustained recovery this year.

Fenabrave said vehicle sales including trucks and buses rose 11.5 percent in May from April to about 287,600 units, due principally to additional working days in the month. Daily sales volumes were little changed from April's three-month low.

Car and light truck sales alone grew 12.1 percent in May to about 274,500, Fenabrave said, confirming preliminary data from an industry source on Friday.

Brazil's middle class has swelled by 30 million in the past decade, making it a key market for automakers with local factories, including Fiat SpA, General Motors Co , Ford Motor Co and Volkswagen AG.

But lagging investment in roads has lead to gargantuan traffic jams in the biggest Brazilian cities and the country's three-year credit boom is beginning to flag, raising alarms in the auto industry and President Dilma Rousseff's government.

Fiat held on to the top spot in Brazil's consumer auto market in May, as sales rose 11 percent from April to 59,484 vehicles. GM surged into second place with sales of 54,780 cars and light trucks, a 32 percent increase over the previous month.

Volkswagen slipped to third with 54,337 consumer vehicles sold in May, a 7 percent increase over April, while Ford sales edged up less than 1 percent to 24,269 cars and light trucks. (Reporting by Alberto Alerigi Jr.; writing by Brad Haynes; editing by Andre Grenon)

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