Title: Business cycle and uncertainties: evaluating the behaviour of the automotive industry in relation to the COVID-19 period in Brazil

Authors: Gerlane Gonçalves De Andrade; Admir Antonio Betarelli Junior; Carlos Alberto Gonçalves Da Silva; Weslem Rodrigues Faria

Addresses: Faculty of Economics, Federal University of Juiz de Fora (UFJF), University Campus, Martelos Neighborhood, CEP 36036-330 – Juiz de Fora/MG, Brazil ' Faculty of Economics, Federal University of Juiz de Fora (UFJF), University Campus, Martelos Neighborhood, CEP 36036-330 – Juiz de Fora/MG, Brazil ' Faculty of Economics, Federal University of Juiz de Fora (UFJF), University Campus, Martelos Neighborhood, CEP 36036-330 – Juiz de Fora/MG, Brazil ' Faculty of Economics, Federal University of Juiz de Fora (UFJF), University Campus, Martelos Neighborhood, CEP 36036-330 – Juiz de Fora/MG, Brazil

Abstract: Drawing on autoregressive vector (VAR) model, this paper analyses supply and demand of automobiles and light commercial vehicles in Brazil from January 2012 to February 2020. Then, it points out how the automotive activity in the country responds to shocks of political proposals or unexpected shocks. The results on the short-term forecast suggest that credit, income, price, and tax influence the business cycles of the industry and returns to a stationary trend over a period of five months. Therefore, the analysis suggests that the automotive activity has a capacity for quick recovery in face of an eventual adverse shock, such as COVID-19 outbreak. This convergence time can be shortened by credit and tax reduction policies, as well as the new automation and electrification technologies in the automotive industry.

Keywords: business cycle; COVID-19; automotive industry; VAR model.

DOI: 10.1504/IJATM.2021.119403

International Journal of Automotive Technology and Management, 2021 Vol.21 No.4, pp.273 - 294

Received: 10 Feb 2021
Accepted: 19 Jul 2021
Published online: 02 Dec 2021 *

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