05/27/2009 09h16

Market keeps strength a month from the end of lower IPI

Valor Econômico – 05/27/2009

The car market continues as heated as in the first five months of last year. The accumulated result from the sales from January to last Monday stayed at 1.086 million vehicles, including passenger and commercial cars. It is a volume that is 1.06% above the total of 1.075 million units registered in the same period of 2008. The result of the sales until the 25th shows May met the expectations of the car makers, which expected to reach the volume of 230 thousand units in the month. Until Monday the total licensing amounted to 183,883 cars.

If the daily average of 11,492 units so far is kept in the four last days of the month, May will end with the sale of 230 thousand cars. But, as the dealerships recall, the activity in the last days normally is more intense, which indicates the possibility of an even greater volume. The pace of the sales indicates May will be very similar to April, for the car industry, when 234.4 thousand vehicles were licensed all over the country. June should be even more heated, according to the dealerships, since it is the last month of tax incentive. Until June 30 the IPI (Excise Tax) rate for cars with 1.0 liter engines is at zero and 50% lower for models with engine between 1.0 to 2.0 liters.

Officially, the representatives of the car industry say they are working with the perspective of the end of the tax incentive. But representatives of the makers show interest in defending the extension of the benefit. Some of them have already raised the possibility of the Government agreeing with a gradual increase of the tax rate. The main argument of the industry is that the IPI reduction was an instrument without which the sector would have not sold 200 thousand cars, what would have spared the layoffs in the entire chain.