One of the biggest challenges for the automotive chain in Brazil under the Inovar-Auto programme is to understand, execute and obtain incentives laid down for Research&Development&Engineering (P&D&E, the acronym in Portuguese).
Specialised consultancies that help automakers and suppliers find ways through the law are growing in number. One such is Pieracciani Associates. In an automotive business workshop the firm there are enough engineers here capable of creating, adapting or improving new technologies. What must be resolved is the projects’ formats, the costs and how to present, or prove, what is under way or already done to the government.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
According to Alfonso Abrami, that consultancy’s associate and managing director, “it is not difficult to do all this at all, it requires structuring. Under Inovar-Auto guidelines, the company that sets P&D&E in motion is entitled to a grant of a 50% spending cut by IPI excise tax credits which means a huge saving.”
The Inovar-Auto companies will not suffer from financial losses in meeting the minimum levels of innovation required by the federal government programme in the first phase due to last until 2017.
“It is less costly and easier to develop locally. The established goals are feasible. In other countries it is usual for R&D to take 5% or more out of net turnover, keeping to the policy even in hard times,” Abrami added.
Automakers will not be the only beneficiaries of the new regime, because investments may be done by the OEM itself and/or parts suppliers.
Abrami said of Inovar-Auto: “It consists of a strong push in innovation and technology with no deadline too close. After all, no one would invest in laboratories, human resources, partnerships with universities/technical centres, and in improving productive processes to get a short term return. There are companies building strategies already in order to remain competitive in P&D&E in a timeframe of 10 or more years.”
