Brazil’s main dealer federation, Fenabrave, has sharply revised its 2026 vehicle sales forecast upward to 8.6% growth, from an initial 6.1%, after first-half registrations jumped 16% to 2.7 million units. The new projection implies more than 5.2 million vehicles sold across all segments this year, with motorcycles on track for a record 2.4 million units. The revision, announced in São Paulo, follows what the federation described as a stronger-than-expected first half, driven overwhelmingly by passenger cars.

The surge rests on a confluence of government stimulus and market disruption. A federal programme, Carro Sustentável, has cut industrial-product taxes on lighter, more efficient models, while the arrival of new Chinese brands has intensified price competition and spurred the opening of more than 200 additional dealerships, bringing the national total to 8,401. Passenger-car sales alone rose 23.7% in the six months to June, and electrified vehicles posted explosive gains—pure electric registrations nearly tripled to 90,400 units. By contrast, truck and bus sales contracted 9.1%, though a separate subsidised finance scheme for truck replacements, Move Brasil, lifted June volumes before its allocated funds were exhausted.

Mexico’s market also set a first-half record, with sales rising 5.3% to 754,394 units, according to data from the national statistics institute. Chinese brands such as Geely and Jetour recorded triple-digit increases, while luxury marques broadly declined. Yet the outlook is clouded by US trade policy. Nissan’s chief executive, Iván Espinosa, said the 25% tariff on Mexican-made vehicles is adding $2,500–$3,000 per car, making entry-level models like the Sentra and Kicks difficult to sell in the United States. The Yokohama-based carmaker, which sourced more than a third of its US sales from Mexico last year, is working to cut costs rather than shift production, betting that affordability pressures will sustain demand for these vehicles.

The next milestones will test both markets. In Brazil, the Carro Sustentável programme expires in December, and the electoral cycle plus weaker agricultural commodity prices are expected to slow economic activity in the second half. In North America, the extension of T-MEC trade negotiations beyond the 1 July deadline leaves the tariff regime for Mexican auto exports unresolved. The conclusion of those talks and the December expiry of Brazil’s incentive scheme are the factual markers to watch.