Government has not yet decided on the extension of the discount for cars

The fleet renewal program will be financed through tax credits, discounts granted by the government to automakers in the payment of future taxes. According to the balance released yesterday (19), 65% of resources intended for discounts on cars have already been used

“(The extension of the program) is not a final decision. Probably, the R$ 500 million ended the program (for cars) ”, he said. “The stimulus will continue in the case of trucks and buses because this takes longer (to use the credits), because you have to remove an old truck or an old bus from the street to renew the fleet. But that is a decision a little further ahead, now the fact is that it was a success”, he said.

In total, the government has set aside R$1.5 billion for the program: R$500 million for cars, R$700 million for trucks and R$300 million for vans and buses. It has a four-month term, but it should run out sooner, as soon as the tax credits run out.

Alckmin, who is also Minister of Development, Industry, Commerce and Services, participated today in an event at the National Confederation of Industry (CNI) on the regulation of the carbon market in Brazil and industrial competitiveness.

“Fleet renewal preserves jobs, replaces an aging fleet with new vehicles that pollute much less and provides more safety in the case of light vehicles”, added the vice president.

The price discounts end of cars included in the federal government program range from R$ 2,000 to R$ 8,000, and may increase depending on the criteria used by factories and concessionaires. The size of the discount on car prices will depend on three criteria: lower price, greater energy efficiency (less polluting) and a higher percentage of domestic content, which is the total number of car parts manufactured in Brazil.

In the case of renewing the fleet of trucks and buses over 20 years old, it is necessary to prove that the old vehicles were withdrawn from circulation.

basic interest

Alckmin evaluated that the tax burden reduction stimulates sales and productive activity and that, therefore, there is a need to reduce interest rates in the country. “Today 70% of car sales are in cash. Those who don’t have money to buy in cash don’t buy. So, what we did: while interest rates don’t fall, and we are sure they will, let’s help so that consumers can have access (to new goods)”, he said.

This Tuesday, the Monetary Policy Committee (Copom) of the Central Bank (BC) started the fourth meeting of the year to define the rate basic interest rate, Selic. The body should maintain monetary tightening with the Selic at 13.75% per year, even with the recent drop in inflation.

For the government, the current level of the Selic rate hinders investments. Although the base rate stopped rising in August last year, it is at the highest level since the beginning of 2017 and the effects of a monetary tightening are felt in the slowdown of the economy.