China’s Jac Motors has 11 pct share of imported vehicle market in Brazil

16 September 2011

Sao Paulo, Brazil, 16 Sept – Chinese automotive company Jac Motors ended August with an 11.18 percent share of the imported vehicles market in Brazil, after starting to sell its vehicles in March, Brazilian state news agency Estado reported.

According to figures issued Wednesday by the Brazilian Association of Automotive Vehicle Importers (Abeiva), Jac Motors has so far sold 14,459 vehicles in Brazil, and altogether companies associated to Abeiva sold a total of 129,281 units.

Jac Motors is the second company on Abeiva’s ranking after South Korea’s Kia, which from January to August sold 53,918 units in Brazil.

In third place is another Chinese company, Chery, which has been selling its vehicles in Brazil for two years, and which sold 12,770 units in the first eight months of the year, which represents a 9.88 percent share of the total number of cars sold by Abeiva associates.

Sales of August of vehicles imported by companies that do not have factories in Brazil doubled (104.1 percent rise) against the same month of last year and rose 11.3 percent against July, to a total of 20,420 units.

Meanwhile, with a view to containing the import of Chinese cars, Treasury Minister, Guido Mantega, Thursday announced a 30 percentage point rise on the industrialised products tax applied to cars and, at the same time, sector companies will be given a tax break provided that at least 65 percent of the parts are produced in Brazil and that they meet 6 out of 11 requirements set out by the government.

There is currently no requirement for national incorporation in Brazilian law and companies can import up to 100 percent of parts and simply assemble the vehicles in Brazil.

Starting Friday, following the publication of the provisional measure, automotive manufacturers will have 60 days to prove that they assemble, manufacture the engine and transmission and paint the vehicles in Brazil, amongst other requirements.

If they are unable to prove that they manufacture the parts in Brazil, the vehicles will be subject to new taxes which, for cars of up to 1000cc will rise from 7 percent to 37 percent and between 1000cc and 2000cc from 11/13 percent to 41/43 percent.

Brazilian website R7 Notícias gave the example of a very successful Chinese model of car in Brazil, which could rise in price from 37,900 to 50,000 reals. (macauhub)