With Exports Down by Half Brazilian Carmakers Urge Lower Export Taxes

Brazilian auto industry An old request of Brazilian businessmen, lower export taxes, was one of the main proposals presented last Friday, May 8, by executives in the auto industry, including steel mills, as solutions for Brazil to halt the reduction in shipments of manufactured goods, during a meeting with the minister of Development, Industry and Foreign Trade, Miguel Jorge, at the regional headquarters of the Brazilian Development Bank (BNDES), in the city of São Paulo.

Both the government and auto industry businessmen are concerned over the current scenario, according to Jackson Schneider, president of the National Association of Vehicle Manufacturers (Anfavea).

"It is a natural concern," said the executive, who said that he handed an accounting statement to Miguel Jorge on the reduction of export volume from January to April this year.

According to him, in terms of number of units, the export volume decreased to nearly half the amount recorded during the same period of last year. That is equivalent to approximately 130,000 units less than in the period ranging from January to April 2008.

To the president of the Brazilian Association of Auto Parts Manufacturers (Sindipeças), Paulo Butori, the tax burden on exported products must be analyzed carefully, because in a moment of crisis "competitiveness, which is very much linked to the amount of tax collected, is greatly reduced."

He warned that many countries have reduced tax on their products in order to gain market share, which in his understanding is the solution for halting the decrease in volume shipped.

The auto parts industry alone, according to Butori, recorded a US$ 580 million deficit in the four-month period, compared with the same period of 2008. "We are experiencing a shortage of buyers for our products in the foreign market." In all of last year, the industry exported roughly the equivalent to US$ 10 billion.

Butori stated that that implies higher unemployment rates in Brazil. He expects the subject to be brought up for discussion with the Brazilian president, Luiz Inácio Lula da Silva.



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