Popular car program will give discounts from R$ 2 thousand to R$ 8 thousand

For the next four months, car buyers will be able to enjoy discounts of R$ 2,000 to R$ 8,000, the Vice President of the Republic and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, and the Minister of Farm, Fernando Haddad. There will also be a discount of R$36,600 to R$99,400 for buses and trucks.

In the case of cars, explained Alckmin, discounts will be granted based on compliance with three criteria: social (lower price), environmental (cars that pollute less) and industrial density (predominance of job generation in Brazilian industry and use of parts national). In all, 20 brands were included in the program.

“The minimum discount will be 1.6%, the maximum discount will be 11.6%. The smallest discount will be BRL 2,000 and the biggest discount will be up to BRL 8,000”, detailed Alckmin.

In the first 15 days after the publication of the provisional measure, explained Haddad, sales of discounted cars will be exclusive to individuals. The deadline, however, can be extended for up to 60 days, in case the demand is greater. After that period, legal entities that buy cars will also be able to benefit from the program.

In the case of buses and trucks, the discount varies according to the size of the vehicle and will be used for the renewal of fleets over 20 years old. Micro-buses (vans) and small trucks will receive a discount of R$ 36.6 thousand. Regular-size buses and large trucks will be reduced by R$99,400. The degree of pollution of the vehicle will also be considered.

To obtain the discount on the truck and bus, the driver must dispose of the licensed vehicle that has been manufactured for more than 20 years and send it for recycling. The buyer will need to present a document to prove the destination of the old vehicle for dismantling.

The amount paid for the old truck or bus will be included in the discount. In one example, in the case of a smaller truck, which would have a discount of R$ 33,600, the reduction drops to R$ 18,600 if the old vehicle cost R$ 15,000.

According to Alckmin, the inclusion of buses and trucks in the program was a request from the National Association of Motor Vehicle Manufacturers (Anfavea). This is because a requirement by the National Council for the Environment (Conama) for the modernization of truck and bus engines made these vehicles more expensive by 15% in 2023.

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When announcing the program, vice-president Alckmin explained that the discounts will be transitory. They will last four months, “until the interest rate drops”. Later, Haddad added that the program could end sooner if demand is higher than expected and the R$ 1.5 billion tax credit to fund the program runs out before the deadline.

The fleet renewal program will be financed through tax credits, discounts granted by the government to manufacturers in the payment of future taxes. In exchange, the automotive industry undertook to pass the difference on to the consumer.

Alckmin explained that the use of R$ 700 million in tax credits is foreseen for the sale of trucks, R$ 500 million for cars and R$ 300 million for vans and buses.

To compensate for the loss of revenue, Haddad explained that 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 ninety days, a period of 90 days determined by the Constitution for the increase in federal contributions.

According to Haddad, the partial reenactment in 2023 will help reduce pressures on inflation in 2024.