Stock of Chinese cars worries the automotive sector, says Anfavea

The Brazilian automotive sector is concerned about the stock of Chinese hybrid and electric cars in the country. This is the assessment of the president Anfavea (National Association of Automotive Vehicle Manufacturers), Márcio Leite. In an interview with Poder360he stated that the strategy of bringing the vehicles to Brazilian territory was a maneuver to anticipate import tariffs and that this movement could have harmful effects on the market.

According to the association, the stock of Chinese vehicles is close to 80,000, in addition to imports that continue to come from Asia. A large number of cars could unbalance the domestic market for new and used cars and even delay the arrival of new models in Brazil.

“The market does not absorb the number of vehicles with these new technologies”said Marcio. “When you have a change from year to year, it is difficult to carry a high inventory from one year to the next, this usually does not happen. Of course, every automaker has its strategy, but normally automakers reduce inventory at the end of the year and when you reduce inventory you need to understand the price and how these vehicles will perform on the market. There is a whole balance that needs to be observed”.

The federal government decided at the end of last year to resume the import tax on hybrid and electric vehicles from January 2024. For 100% electric cars, the charge started at 10%, is now at 18% and will reach 35% in July 2026. Hybrids (powered by fuel and energy) will pay different rates.

To prevent the arrival of even more imported vehicles in the country, Anfavea has advocated a faster increase in the import tax. As shown by Poder360the association’s desire is for the rate to reach 35% immediately. The argument is that with the start of operations of Chinese automakers’ factories in Brazil in the coming months (BYD in Bahia and GWM in São Paulo), the current stock is already more than enough to supply the market before domestically produced vehicles take off.

In conversation with the Poder360Márcio stated that the growth in sales of electrified vehicles was already expected and that the infrastructure needed to make electric driving more enjoyable has advanced. However, the executive said that the dominance of electric cars should not be anything like what is happening in Europe, as Brazil has a strong biofuel industry, a more sustainable alternative for decarbonization in the Brazilian scenario.

“It is an infrastructure that has evolved along with the market. In general, it has been structuring itself, but biofuels are a gigantic force. No one has a distribution network like ours and the country has to look at what it knows how to do well.”he declared.

TAX REFORM

Márcio stated that the transformation of the country’s tax scenario will be beneficial for the automotive industry. In the executive’s view, the reform will allow exports of vehicles produced in Brazil, as it will reduce taxes on production. “It is necessary to go through this process and we will certainly have more competitiveness in exports because this proposal will significantly reduce the tax residue”he declared.

Despite welcoming the reform, the association is still waging a war in the National Congress to remove cars from the selective tax. According to Anfavea, including the category in this tax will drive the Brazilian population away from newer vehicles with technologies aimed at decarbonization.

“Some issues still need to be clarified, such as the removal of the automotive sector from the selective tax, because it goes against what we are seeking, which is to accelerate fleet renewal and decarbonize the sector”said Marcio.

ENERGY CRISIS

Regarding the severe drought that reduced water reservoirs in the country and led to the activation of thermal plants to supply the country with more expensive electricity, Márcio said that it is still too early to assess whether there will be an increase in production costs or a worse scenario such as a lack of energy.

However, the executive confirmed that the matter is on Anfavea’s radar and that it is a topic that is being monitored.“In our assessment, it is too early to say whether there will be an impact on the automotive industry and what the effect will be on the energy distribution system, but it is a matter that concerns us and it should be monitored closely.”