Brazil: government will announce measures to reduce the price of popular cars this Thursday

The federal government is expected to announce new measures to lower the prices of popular cars.

Credit lines are expected to be offered to the factory sector, tax reductions, an increase in the Nationalization Index for Manufactured Goods, and a vehicle financing program.

The expectation is that fewer taxes will be levied on the automotive sector.

But so far, the government is running counter to this, as FGV Economics professor Rogério Mori explains.

“Sometimes they do stupid things, like wanting to tax import platforms, they wanted to tax betting sites, taxing fuels, even the issues of judicial disputes, looking to recover these pending tax litigation issues.”

“They are looking for this type, not recurring revenue; you collect this once. Once you have reduced this litigation, you will not have this as recurring revenue.”

“We are talking about an increase in the tax burden, which should be the tonic from now on,” said Mori.

The government’s goal is for the market to offer popular cars that cost between R$50,000 and R$60,000 (US$10,035 and US$12,042).

Currently, the cheapest model does not cost less than R$68,000 (US$13,647).

“It is not a popular car. Most of the population cannot afford a car of this value.”

“In the past, the popular vehicle was extremely accessible, cheap, and with much more affectionate models.”

“I think it’s difficult to have something that will impact the economy with this kind of measure”, says the professor about the prices intended by the government.

Representatives of the automotive industry say that automakers have little profit margin in producing popular cars and that reducing factory prices is difficult.

With information from Jovem Pan

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