Government ends discount program for light cars

The government closed, this Friday (7), the vehicle purchase incentive program with the release of all resources available for light cars. According to the balance of the Ministry of Development, Industry, Commerce and Services (MDIC), 125 thousand cars were sold with discounts between R$ 2 thousand and R$ 8 thousand, or 1.7% and 11.7%.

“We had cases of much greater value reduction, 14%, 16% to 21%. That’s on account of the private sector, automakers and dealerships. And it was very positive because the discount was for cars up to R$ 120,000, but over R$ 120,000 it also increased sales because it aroused interest”, said the vice-president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin, when presenting the numbers of the program.

According to him, nine assemblers participated with the sale of 117 car models. In the last week of June, the biggest sale of the last 10 years was registered. The record in the history of the automotive industry was set for June 30, when 27,000 vehicles were licensed.

“If you take the peak of the automobile industry, it was a production of 3.8 million vehicles. That was the pinnacle. Today, production is 2.3 million. Not even in that period, there was not a day that sold, which registered 27 thousand vehicles”, he highlighted.

R$ 650 million of the R$ 800 million available for light vehicles were released. According to the MDIC, the remaining R$ 150 million will compensate for the loss of tax collection caused by discounts on the final price.

As for trucks, vans and buses, the program is still in effect. The deadline is four months or until the tax credits are exhausted. The use of R$ 700 million is planned for the sale of trucks and R$ 300 million for vans and buses, of which R$ 100 million and R$ 140 million, respectively, have already been used.

For Alckmin, the use of credits for heavy vehicles takes longer because the program aims at renewing the fleet and there is a delay in the removal of old vehicles by the departments of Transit of the states. “I spoke with Denatran (National Traffic Department) and he took responsibility for talking to all the Detrans”, said Alckmin.

tax credits

The fleet renewal program is financed through tax credits, discounts granted by the government to automakers in the payment of future taxes, totaling R$ 1.8 billion. In exchange, the automotive industry undertook to pass the difference on to the consumer.

To compensate for the loss of revenue, the government intends to partially reverse the exemption on diesel that would be in effect until the end of the year. Of the R$ 0.35 of the Social Integration Program (PIS) and Contribution for the Financing of Social Security (Cofins) currently zeroed, R$ 0.11 will be re-encumbered in September, after 90 days, the period determined by the Constitution for the increase of federal contributions. With the reenactment, the rate will rise to R$0.14 in October.