By Alzira Rodrigues | 6/22/23 | Translated by Jorge Meditsch
The R$ 500 million tax credit approved by the federal government for the cheaper car package should probably end by this Friday, 6/23, much before the four months estimated at the program institution and without benefitting legal persons as previewed initially.
“The party is over”, said Volkswagen’s president for South America, Alexander Seitz, on Wednesday (6/21) night, before the company’s event The One, which awarded VW’s best suppliers in the region.
He criticized the lack of predictability currently prevailing in Brazil, which can cause results contrary to the expected when the incentive package was announced on June 5.
VW’s president informed that from June 6 through 19, the brand’s retail sales increased by 38% over the same period in April. Nonetheless, direct sales, such as those for rentals and other companies, fell by 35%.
“In practice, we will have a tie – the program will not take to an effective increase in sector’s business and larger use of the installed capacity as it was proposed”.
In his evaluation, there is a risk of plants stoppage with temporary layoffs in July and August due to the present market turmoil caused by purchase anticipation by the common consumer and a total lack of business from legal persons:
“There is a whole supply chain that must be taken into account in a sales incentive package. As it was applied, the program excluded half of the market. It is very complicated. As I said, what we need is predictability”.
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