By William Jones, Contributing Reporter RIO DE JANEIRO, BRAZIL – The finance minister in Brazil, Guido Mantega, confirmed that the government is preparing a new stimulus package for the automotive industry as the sector continues to face job cuts and declining sales. The government’s special program will allow people to receive credit in order to buy a car in an effort to ramp up sales. Mantega has been Brazil’s Finance Minister since 2006, photo by Comissão de Assuntos Econômicos/Creative Commons License. The repayment is spread over an average of 48 months and a guarantee fund will be created with the resources of independent financial institutions in order to cover possible defaults. The fall of domestic sales and exports has caused car manufacturers to switch measures in order to adapt and avoid excess stock. Manufacturers could resort to shutdowns and job cuts. At a seminar in São Paulo Mantega said that the government is “allowing financing, which will be private, with some conditions.” Mantega also revealed that measures to get the motor industry running again and protect jobs also include a stimulus to increase trade with Argentina. He stressed that the government is negotiating with the country to release barriers on car exports. “Right now, it is difficult to export to Argentina which is our main automotive partner,” said Mantega. “There was a decline of exports to an important market and we are working to enable the increase in exports to Argentina,” he added. The stimulus to an important sector of the Brazilian economy is also an effort to increase the country’s Gross Domestic Product (GDP), which is currently estimated to round out the year at 2.3 or 2.5 percent. The Brazilian government’s GDP projections indicate growth of three percent for 2015 and four percent in each of the next two years. Read more (in Portuguese). * The Rio Times Daily Updates feature is offered to help keep you up-to-date with important news as it happens. 7 Responses to "Brazil to Stimulate Automotive Sector: Daily" martins April 29, 2014 at 11:41 AM If the Government wants to ramp up auto sales why don’t they try decreasing the taxes on automobiles which right now are at about 30 to 40 % of the retail price of a car. In addition people have to pay imposto every year thereafter. How can the Government hope to help solve the problem when they are the major cause of the problem in the first place. A car in Brazil is approximately twice the price that you can purchase the same car in the US for. It seems to me that the best thing the Government of Brazil can do is get out of the way of the market and stop being so greedy. Open up the market and stop with the credit schemes. The Government likes to brag about how they’ve taken 40 million people out of poverty and now most people in Brazil are up to their nose in debt. Now the Government proposes to help people get even further into debt. That sure makes a lot of sense. With friends like that, who needs enemies. Adriano April 30, 2014 at 10:42 AM I agree with you in parts martins. I know that the government taxes are high but you can not discard the greed of automotive industry. This video explains a little bit about this topic(https://www.youtube.com/watch?v=ifp3L0xYmF4). One other thing that disguting me is why help a industry that produces rubbish for us, there is no sense the difference in quality between cars produced in Brazil and Europe or USA, and even with this difference brazilians continue to buy new cars. Furthermore, why help people buy cars if our infrasctructure does not support more cars, we are fed up with the jams in the big cities. Pingback: Brezilya Otomotiv Sektörünü Canlandıracak » İhracat Bilgi Platformu Blog martins April 30, 2014 at 4:57 PM adriano, muito obrigado…I thoroughly enjoyed the video. I think there is plenty enough blame to go around between the politicians, the car companies and the government. Brazil is a pretty greedy country, and I see that on almost every level from the way people drive here in Araruama to the prices that the local stores charge when holiday comes around. I am American and I have bought new cars in new york and I can honestly say the price for a car here is about double what you pay in the US. The gasoline is also about 33% higher as well, and everybody in the US screams bloody murder about how high the price is. It just seems that Brazilians have to pay more for just about everything. I’m glad you brought up infrastructure because the road I live on in Araruama is a dirt road. There is no asphalt, stop signs, traffic signals or any type of infrastructure whatsoever around here. When it rains we get huge potholes everywhere. When the prefeitura sends in the sand trucks to fill in the potholes (about once every two months) they fill it in with sand which then causes poeira flying everywhere on a windy day or when a car, motorcycle or truck coming zooming down the road. We pay a lot of property taxes here and we have a lovely home but the outside of our home looks like it might be the same way it was 200 years ago. It’s pathetic. Which brings me back to the greed of the government and the politicians. We pay our taxes and we seem to get nothing for our money in return American In Rio May 2, 2014 at 5:46 PM Terrific vídeo. Thanks Martins. This is the government the people accept. What would happen if no one voted in October? martins May 3, 2014 at 3:05 PM judging by the protests, strikes and so on, I’m not sure if this is the Govt they accept. Given their choices come election time, this is the Govt they choose. If no one voted, do you think think the Govt would get the message? American In Rio May 6, 2014 at 9:39 AM Martins, It seems to me that without districts in the House of Deputies and with Mandatory voting, “democracy” doesn’t really exist in Brazil. Clearly when someone votes for Deputies it’s a free for all. They can’t really hold someone accountable for bad service or corruption when it’s not an election by district. My comment about no one voting is because it would remove the image legitimacy from this government. I spend about a week a month in the States for business. And the last 2 Presidential elections drove me nuts. (Another debate – Really?) Entirely, too long. But, it has struck me that during the 3 elections I’ve seen up close here, a hybrid would be a vast improvement. The public here has no idea who these candidates really are. Dilma has been President for nearly 4 years and I have yet to see her in a truly tough debate, press interview or press conference. Can anyone imagine the pathetic Minister Mantega doing “Meet the Press” regularly? I heard the environment minister do a Hard Talk interview with Stephen Sacker on the BBC. She was a party hack and didn’t represent the environment or party well. As tiresome as those elections are they uncover character flaws and really expose the candidates. How long did the popular Texas governor Rick Perry last – about 3 weeks or something? I don’t have any illusions about American politics. But I do see some aspects which could be a huge help to Brazil. Leave a Reply Cancel Reply Your email address will not be published.