Brazil Doesn’t Give New Incentives for Automakers image

Although Brazil has no plans to give further incentives for automakers, it still plans to boost competitiveness of other industries.

“The industry already has many incentives. I don’t see the need to touch that,” said Trade and Industry Minister Fernando Pimentel.

He also added that he encourages automakers to invest more in innovation to meet surging demand in the world’s fourth biggest auto market. Last week the country announced a battery of tax breaks and subsidized credit to help struggling manufacturers and speed up the country’s fragile economic recovery. Automakers will be given tax cuts in exchange for future investment in research and development.

“Bring over here the engineering, production, research and innovation departments. We want products conceived in Brazil. We have the capacity to produce,” Pimentel declared.

Pimentel aims at helping other industries regain competitiveness, such as pharmaceuticals, chemicals, appliances and fertilizers as sectors that are on the government’s radar. In 2011, Brazil, in an attempt to encourage local production, sharply raised taxes on imported cars.

“The world is showing that whoever has the demand, controls the supply … And we have a market of almost 200 million Brazilians. We have the ball. That is why people want to invest here, sell their cars here. Why would we give up that power?,” Pimentel said.