Brazil’s car sales could rise nearly 20% in 2023 on tax breaks for purchases

SAO PAULO (ICIS)–Brazil’s car sales could be nearly 20% higher in 2023, year on year, thanks to the tax breaks to be implemented by the government on car purchases, the country’s automotive trade group Anfavea said.

Last week, Brazil’s federal government said it would implement a programme of tax breaks to lower the price of cars in vehicles of up to Brazilian reais (R) 120,000 ($24,000).

The measure seeks to revive a beleaguered industrial sector such as automotive, which in 2023 has had several plants idled at times as consumers retreat due to high interest rates and a slowing economy.

Car makers in Brazil, represented by Anfavea, are hopeful the plan will be the inflection point for the industry to start its recovery.

At the beginning of 2023, Anfavea said it expected car registrations, or car sales, to stand at 2,040,000 units for the year, up 4.1% compared with the 1,960,000 units registered in 2022.

However, the plan to be implemented by the government could increase car sales by 200,000-300,000 units, said the trade group.

That would put the upper end of the range at 2,340,000 units, representing – if realised – an increase in sales of 19.3%, compared with 2022.

“The plan announced by the Federal Government is very positive [and will help] revive the industry and the automotive market,” said Anfavea.

($1 = R5.00)