After the announcement of stimulus measures for the automotive industry announced by the Federal Government last week, the market is already starting to feel the effects of this movement — and they are not good at all. With incomplete information and no concrete definitions of the project, customers are already canceling their reservations made at the concessionaires.
Some shopkeepers began to receive reservation cancellations shortly after the announcement made by the Vice President and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin (PSB-SP). The talked about tax cuts and consequent cuts in the prices of models up to R$ 120,000 made customers anxious and, afraid of losing money, several chose to undo the deals.
According to Motor1 staff, several stores reported losses of 20% in recent days. However, the Canaltech found out at a dealership in the neighborhood of Saúde, in São Paulo, that dropouts reach 40%, largely due to the confusion generated by the government’s announcement.
How will car prices fall?
The measure announced by Alckmin had the central idea of making entry-level models cost less than R$60,000 again, but, with cuts ranging from 1.5% to 10.75%, the cheapest cars in Brazil , such as Renault Kwid and Fiat Mobi, would still cost more than this amount.
In order to reach the maximum discount, however, the Federal Government has stipulated some rules and, according to Alckmin, the smaller the car, the cheaper it can be. The rules are:
- Initial value: the lower the value of the car, the less taxes it will pay;
- Issuance: the less emissions the engine makes, the less taxes will be charged;
- Production: the more national parts are used, the greater the discount.
On the same day of the announcement, Alckmin went so far as to say that these measures would last for one year, but, soon after, the Minister of Finance, Fernando Haddad (PT-SP), said that the cuts would only last for 3 or 4 months. The portfolio commanded by the PT has until next week to make the adjustments and effectively put the plan into effect.
However, the exact criteria and the percentage that each rule will affect the price are still unknown. The expectation is that everything will be detailed by Haddad next week. Until then, as we found out, shopkeepers should continue with sales dropouts.
Fenabrave (National Federation of Automotive Vehicle Distribution), an entity that represents dealers and resellers, should announce May sales soon and we will know the real effect of these withdrawals.
Source: Engine1
