Alkamin announces the end of the program of discounts on light vehicles

Vice President and Minister of Development, Industry, Trade and Services. Geraldo Alcmene (PSB), on Friday (July 7, 2023) announced the closure of its light vehicle purchase discount program, with 125,000 vehicles sold. Elkamin noted that the temporary program achieved its goal of stimulating the auto industry and providing jobs.

According to Alcmene, the project was a wise move by the president Luiz Inacio Lula da Silva (PT) to help the industrial sector responsible for 1.2 million jobs in Brazil. The vice president also stated that the program succeeded in increasing sales of vehicles with a value of more than R$120,000, i.e. outside the scope of the program, in just over 4 weeks.

“Although the incentive was up to R$120,000, more cars worth more than R$120,000 were also sold, because it sparked consumer interest.”Alcmene said. Government-sponsored rebates included cars worth up to R$120,000 and could range from R$2,000 to R$8,000.

The program to make cars cheaper was launched by the federal government on June 5th. Initially, it offered R$500 million in tax credits to the automakers, but the amount was increased to R$800 million due to high demand.

From the total, the equivalent of the collection loss is deducted with PIS (social integration programmes), Cofins (contribution to social security financing) and IPI (tax on industrial products). Thus, the credit extended to the automakers was equivalent to R$650 million.

Watch Alcmene’s speech in full (25 minutes, 32 seconds):

heavy vehicles

The discount car program is over, but the incentive to renew truck and bus fleets continues and must be improved. Unlike light vehicles, the balance of heavy vehicles has not yet been fully used.

At the launch of the programme, R$700 million was saved for trucks and R$300 million for buses. According to data from the Ministry of Industry, a R$100 million credit was used for trucks and R$140 million for buses.

According to Alckmin, this lower use of benefits is due to the greater discount incentive for those who get rid of older vehicles that pollute the environment more. This process of dismantling the vehicles is time-consuming, but the vice president said it will speed up the exit of these vehicles from circulation.

“I spoke with Dinatran and measures are already being taken to get a faster unloading of the old bus or truck in Detran and this is what will lead to the tax exemption”Alcmene said.