BMW posts a 30% drop in first-quarter sales in Brazil due to a tax rise for imported cars

Article by Christian Andrei, on April 16, 2012

The first quarter was not a good period in terms of sales in Brazil for Bmw as the country increased the tax for imported cars. Apparently, in order to protect jobs and automakers with factories in Brazil the government increased the industrial products tax on vehicles with less than 65 percent of their parts produced in the country.

As a result, car sales fell 30 percent. Still, the bad news continue because manufacturers like Bmw increased prices of their cars by 15.9 percent, while the other 14.1 percent were absorbed by Bmw and dealerships. According to Autonews, Brazil wants to protect carmakers based in the country. For those who don’t know, the car market is dominated by Volkswagen, Fiat and General Motors, while Bmw has a small market share.

Still, the Bavarian manufacturer sees Brazil as a country with very big potential, just like China. In the first quarter, Bmw sold 1,888 units in Brazil, down from 2,137 units a year earlier. Moreover, Bmw also put on hold plans to build a factory in Brazil because of the IPI increase. Finance Minister Guido Mantega said that the IPI increase aims to force car manufacturers to build key components in Brazil.

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