A government plan to kick-start Brazil’s stalled automotive sector should be implemented this year and include tax credits for car makers and cheaper financing for consumers, the country’s planning minister said on Monday, according to Reuters.

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The measures are aimed at reversing a sharp downturn in car sales in Brazil that have led to a recent round of job cuts at manufacturers such as Volkswagen, the report added.


“There are some legal and tax details” that need to be worked out, planning minister Guido Mantega told Reuters after speaking at a seminar in Sao Paulo, adding: “Once these are solved, (the plan) will be put into practice.”


According to Reuters, Mantega said President Luiz Inacio Lula da Silva had authorised the plan and asked that a task force made up of representatives from the chief of staff’s office and finance, development and planning ministries be set up to work on it.


Reuters noted that car sales fell 8% in the first half of the year as consumers stayed away from dealerships given the high cost of financing a car purchase and general economic instability.

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To counteract the slowdown, many car makers have given their workers temporary leave or tried to lay them off, Reuters added.


Last week, Reuters noted, Volkswagen announced it would slash nearly 4,000 jobs and General Motors said it would cut 450 jobs, although it later reversed its decision after employees threatened to strike in protest.


Mantega told Reuters the government would not necessarily lose out if it gives consumers or car makers tax breaks to revive the sector.


“Whatever we lose at first we make up later with any business we create,” he reportedly said.