Brazil Auto Trade Group Seeks to Boost Exports

Brazil's carmaker organization AFAVEA is pushing for changes in government tax policies that it says would enable the country to more than double vehicle exports to 1 million units by 2017.

Luiz Moan Yabiku Jr., who just assumed ANFAVEA's rotating four-year presidency, tells reporters that Brazil's tax on automakers is making the country's exported vehicles too expensive.

Yabiku, who is director of institutional relations for General Motors do Brasil, urges the country to provide a tax rebate on autos shipped overseas. He notes that Brazil exported 30% of its output a record 900,000 vehicles in 2005. Last year the country exported only 420,000 units, or 13% of domestic production.

Yabiku cites an ANFAVEA study in 2011 that found that costs in Brazil were higher than those in China and Mexico by 60% and 33%, respectively. He acknowledges that only part of that can be blamed on higher taxes and unfavorable exchange rates. The rest, he says, is caused by high materials costs, poor infrastructure and a lack of trained workers.

Remedying those problems should enable carmakers to boost annual auto output in Brazil to 5 million vehicles within four years from 3.3 million units in 2012, Yabiku contends.