Sao Paulo, Brazil, 2 June – Effa Motors, a distributor of Chinese cars in Brazil, plans to build a assembly unit in Manaus in 2010 to manufacture 50 to 100 vehicles per month, said chief executive José Geraldo Sampaio Moura.
Giving assurances that the project had been approved by the regulators of the State of Amazonia, Sampaio Moura told Macauhub that “due to tax issues it is cheaper to make cars in Brazil than import them.”
Currently, Effa Motors assembles the Chinese vehicles in its factory in Uruguay, a country which ahs tax agreements with Brazil as part of Mercosur (South American Common Market).
Effa Motors, which has been in Brazil for a year, has dealers in the main state capitals and sells around 200 Chinese vehicles per month, particularly utility vehicles, and is the official importer of Chinese brand Changhe.
“The Chinese cars that arrive in Brazil are of simpler models, as the competitive advantage in terms of price becomes slightly diluted due high tax rates,” said the director of the Brazilian Association of Automotive Vehicle Importers (Abeiva), Carlos VIlhena.
According to figures from Abeiva, Effa Motors sold 246 Chinese vehicles in Brazil in the first four months of 2009, whilst Hafei sold 335 and Chana sold 107. (macauhub)