MercoPress. South Atlantic News Agency
Brazil increases tax on cars with high content of imported components
Brazil on Thursday raised a tax on cars with a high content of imported components to protect jobs following a surge in shipments from China and elsewhere that has been fueled by a rally in the currency. Read full article
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Disclaimer & comment rules“Mantega lifted the so-called industrial products tax on carmakers by 30 percentage points, except for those who source 65% of their parts from the Mercosur trade bloc (read: Argentina), Brasil, or Mexico.”
Sep 16th, 2011 - 07:41 pm - Link - Report abuse 0Why Mexico? – when these parts are US products made cheaply in Mexico.
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“The measure will raise the cost of imported cars by as much as 28% and force foreign automakers to build key components in Brazil.” “JAC Motors, Suzuki Motor Corp. and Chery Automobile Co. could reconsider their decision to invest in Brazil due to the rise in the tax.”
Why reconsider? – this move by Mantega makes it even more advantageous to build their components, assembly plants, etc, in Brasil.
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“Carmakers must meet six of 11 requirements ranging from building of transmissions to the assembly of cars in Brazil in order to avoid the higher tax”
So, does this mean that the lucrative Argentinian Parts industry will need to re-locate to Brasil?
I doubt it, but it always seemed strange to me that Brasil – with no car industry *of its own* – should ‘give away’ Parts manufacture, and merely be a glorified Meccano-assembler of bits made elsewhere.
Is there no desire to produce BRASILIAN cars for the South American market?
Sounds somethimg like Argentina. Last week a newspaper article stated that imported car parts into Argentina cost over $15,000 (dollars, not pesos) for each car produced in Argentina.
Sep 16th, 2011 - 09:59 pm - Link - Report abuse 0Geoffward,
Sep 17th, 2011 - 07:08 am - Link - Report abuse 0Mercosur and Mexico have signed an agreement to help both curb the impact of Asian products in their markets. That's why Mexican products aren't being taxed.
As for producing genuinely local cars... Well, China became able to produce its own cars through decades of receiving technology from foreign corporations who in exchange earned the right to produce cars in China. Can Mercosur force foreigners to make the same? If so, then perhaps we'll be able to produce our own cars... in some decades. And they'll be as 'safe' as Chinese cars are these days.
China became able to produce its own cars through decades of receiving technology from foreign corporations who in exchange earned the right to produce cars in China.
Sep 17th, 2011 - 07:51 am - Link - Report abuse 0Forget, you forgot that the Chinese also STOLE the technology from those greedy foreign corporations. Only the Koreans didn't play that game. Back to the greedy ones, those CEO'S were laughing because they were making money (oh oh cheap labor) and Chinese thought by himself (ahh, you fool, I'm screwing you by taking your technology infront of your eyes)
Yeah, I'm aware that China has stolen technology, not only in the automobilistic sector but in many others as well. Plus, it should be remembered that, not only the technology stealing, but even the way China has promoted 'voluntary' technology transfer - making companies pass technology in exchange to having some market share in China - isn't considered legal by the WTO. Be that as it may, China's hardly alone in doing that. Japan and Korea did the same some decades ago. And the Americans also stole European stuff during the XIX century. Apparently most great powers in the technology field have ascended to their position by doing what China does today.
Sep 17th, 2011 - 09:19 am - Link - Report abuse 0Anyway, I'd like to remind Geoff something I believe I have already told him before: Brazil did have some local car makers. By the 90s, when the market was liberalized, many local companies in the manufacturing sector were bought up by multinationals and then reduced to being assembly plants for cars designed abroad. Troller Veículos Especiais is just the most recent example of that. If Geoff wants Mercosur to have its own local car companies, then perhaps we should preclude the Americans, the Europeans, and the Asians from 'investing' in our countries. Don't know if his neoliberal sympathies will allow him to agree to that.
I do know that if a country the size and richness as Brasil, with its own extended and prioritised market, Mercosur, REALLY wanted to develop its own vehicle industry, it would set up the production and sales conditions to advantage this 'home' development..
Sep 17th, 2011 - 02:40 pm - Link - Report abuse 0If China, India, Malaysia, South Korea, etc, were able to do this over the last few decades, building on imported advanced technologies, then there is no good reason on earth why Brasil could not have done it. We would have not been 'all the way ' by the turn of the millenium, but when this present totally favourable environment arrived, we would have been able to 'take off and fly'.
Just how much advanced technology remains beyond the capability of Brasilian nationals, after all these years of absorbing foreign car-design & build techniques here in Brasil?
It needs long-term, forward-PLANNING - something conspicuously absent during the dead and stultifying years of Lula.
What a failure!
Its all very well building a national economy on extracting oil for other nations to buy, but all this is, is just another loss of raw materials UNLESS the profits and the raw materials are translated into advanced technology and manufacture AT HOME.
What (and who) is stopping our great leaders from going for THE BIG GAME ?
Geoff, I'm going to repeat this:
Sep 17th, 2011 - 04:17 pm - Link - Report abuse 0“Brazil did have some local car makers. By the 90s, when the market was liberalized, many local companies in the manufacturing sector were bought up by multinationals and then reduced to being assembly plants for cars designed abroad. Troller Veículos Especiais is just the most recent example of that. If Geoff wants Mercosur to have its own local car companies, then perhaps we should preclude the Americans, the Europeans, and the Asians from 'investing' in our countries. Don't know if his neoliberal sympathies will allow him to agree to that.”
Yeah, let's create our car makers. But let's also prevent the gringoes from taking them over whenever they achieve the least bit of success.
China built its car industry by forcing companies to hand over knowledge. It managed to do that b/c it offers a very attractive market. Brazil offers no such thing as it's more less than 5 x China's size. Korea and Japan begged for technology for decades - and when that failed, they simply stole it. As for India's car industry, the only really Indian thing is the design; but the technology hand is almost all German. As for Brazil, I'm unaware of us receiving “absorbing foreign car-design & build techniques.” We assemble cars, that's all. There's no technology transfer as there is in China.
and please, change your writing. You need to use this declamatory style even when you're discussing car industries? Jesus, talk about bad taste.
“long-term, forward-PLANNING - something conspicuously absent during the dead and stultifying years of Lula.”
It was conspicously absent during the FHC years. It was his reforms that enabled multinationals to buy up national assets and destroy local industry. It was FHC who said moronic stuff such as that there's no difference between local and foreign industries. The military implemented laws so local industries would've priviled access to credit. FHC removed them. FHC, your (and the multinationals') hero.
Nice to be able to stimulate you to add information-value to Mercopress topics.
Sep 17th, 2011 - 08:00 pm - Link - Report abuse 0You will not that my postings come in many styles, from the declamatory to the strictly-for-fun.
But I promise you THERE IS ONLY ONE GEOFF WARD
Raise your hands above your head, wave slowly and chant, Corinthians-style. . . .
:)
Sep 17th, 2011 - 10:34 pm - Link - Report abuse 0And the Americans also stole European stuff during the XIX century
Sep 18th, 2011 - 07:19 pm - Link - Report abuse 0And that's why the Dutch created the nick name “Yankees” (Jan and Kees) for them. Those where the most common names of “thieves” in Holland and names of the people that migrated to the US.
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