BRAZIL: Imports from Mexico exceed FTA quotas
Nissan Versa is imported into Brazil from Mexico
With growth of 130% year on year, sales of Mexican-made cars exceeded the ceiling set by the Brazilian government. The full 2012 year volume was US$1.45bn but by the end of July it had already reached $1.74bn.
Over-quota imports, excluded from the bilateral trade accord, are subject to regular 35% import duty and 30% additional IPI excise taxes.
Hit hardest, Nissan has started paying additional taxes because 75% of its sales in Brazil are imports, all from Mexico. Renault, in contrast to its alliance brand, sells nearly the same percentage of Brazilian-made models.
The Japanese brand has decided not to trim significantly the incoming flow of March and Versa compacts until production at its new factory in Resende, Rio de Janeiro state, starts in the first quarter of 2014.
But it is betting on the government easing the rules, at least as far as extra IPI is concerned, for automakers who are building, or intend to build, plants in Brazil.
The announcement about the different IPI for newcomers has been continually postponed because controversial fuel economy improvement goals are included in the same set of rules.
News about this issue is expected this week.