The incentive plan to promote the return of popular cars, aligned by the Federal Government, is not meeting the expectations of Brazilians. Many believed that the measure would improve the purchase of brand new cars in the country, but the reality disclosed by former President Lula's team is quite different from what had been promised.
The measure was intended to encourage the production of popular cars, with a maximum value of R$50 thousand, and to reduce prices for the final consumer. However, according to information released by the government, the price of popular cars has not been significantly reduced and, in some cases, even increased.
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This is because the proposals presented do not address the country's structural issues. Furthermore, with limited fiscal space, reductions in federal taxes such as IPI and PIS/Cofins, which could result in significant discounts on the final prices of vehicles of up to R$ 120,000, still pending approval from the Ministry of Farm.
Auto discount may not be enough to drive long-term sales
If the Ministry consolidates this discount, sales have everything to grow, certainly at a volume still lower than expected. It is this limited volume that raises concerns in the group. If sales had accelerated, the tax reduction would be offset by the number of vehicles sold, increasing public revenue.
However, without more affordable funding, this measure will not have the full impact needed and could end up generating a lot of expense for public coffers. In order to minimize the damage, the Minister of Finance, Fernando Haddad, said that this is a topical and temporary measure that will last only three or four months.
Sales to individuals
Automakers are negotiating with dealerships to expand the possibility of direct sales to individuals in the retail of resellers. Currently, this option is only available to people with disabilities, taxi drivers and small businesses, but it may be extended to all consumers.
In addition to the tax reduction, this new guideline will allow consumers to access discounts similar to those offered to legal entities, around 18% below the list price.
The concessionaire will receive a fixed commission for intermediating the negotiation and will pass on satisfactory discounts to the consumer. With the promise of a price reduction by the Government and this new direct sales option for individuals, there are great chances of a significant increase in sales.
