Luxury car market begins recovery

In ED of quotas that allowed the importation of vehicles without the extra 30 percentage points in the tax on industrialized products (IPI), the luxury car market starts to show signs of recovery. First-quarter numbers show that six European brands Audi, BMW, Mercedes-Benz, Land Rover, Porsche, and Volvo-, along with the American Dodge, managed to improve performance in Brazil, against almost generalized fall in imports in the most popular segments, operated mainly by Asian brands.
Among the most expressive results, Mercedes-Benz and Porsche more than doubled sales, compared to the same period last year. BMW, which last week signed a memorandum of understanding for the construction of a factory in the State of Santa Catarina, had growth of 2.1%, while Audi and Land Rover-also with production plans in the country-have seen demand for their cars up 31.5% and 4.6%, respectively.
The scenario has improved after the Decree of the new automotive system, published on 3 October, released the importation of up to 4.8 thousand cars per year without differentiation of IPI that brought down the sales of these brands last year. For automakers with investment projects already submitted to the Government, such as BMW, this quota is even greater-equivalent to 25% of the future production capacity.
So, in addition to the quota of 4.8 thousand cars to which he is entitled as an importer, BMW, as an investor, you can download up to 8 thousand cars per year without having to collect the IPI. This was the way found by the Government to attract investment and give newcomers marks, viability while maintaining restrictions for groups without productive activities in the country.
Released from the tax surcharge, brands such as BMW, Audi and Mercedes-Benz have announced cuts in prices. James Lamb, national sales manager of Audi-whose free import quota of IPI is 3.9 thousand extra car, says that the reduction was around 10%.
The goal, he said, is to sell 7 million vehicles this year, which, if confirmed, will mean an increase of 41.7% in relation to the volume of 2012, when the plates issued from German brand fell 8.5%. This forecast takes into account the extension of the commercial network of Audi, with the opening of stores in João Pessoa (PB), Juiz de Fora (MG) and Santos (SP), in addition to the impact of releases, such as the Q3 SUV, already responsible for a quarter of the sales of the brand in the country.
In the opposite direction of European manufacturers, Asian automakers are in free fall, with emphasis on the indentation of 31.3% sales of Kia Motors this year. Not enabled to the new regime, the Korean brand follows paying IPI.
Similarly, China's automakers--which arrived with ambitious plans for the country and, in a short time, they managed to snatch up more than 9% of imports-now represent a small fraction of a market that is moving to the 4 million vehicles. Chery, for example, now sells only one fifth of the volume that had a year ago. In turn, the plates issued from JAC Motors fell 14.8% in the first quarter.
Luis Curi, Chery's commercial Director, says that the mark closed 38 resales to tailor the distribution network to new heights. The number of dealers has dropped from 102 to 64 shops.
According to the Executive, the restructuring of the Group's businesses in Brazil-with the array in China assuming the command of business activities-also affected the supply of utilities, as well as led to delays in the accession of the new automotive system manufacturer, published only on January 31.
"Only we return to the game in February," says Curi, which provides for a normalisation of the company's sales in the next two months. Enabled to the new regime as an investor, as it builds a factory in Jacareí (SP), Chery received an import quota of 25 thousand cars per year. Curi believes that the brand can still achieve sales of 30 million vehicles this year, more than double compared to 14.2 thousand units in 2012.
Just over a year after major cars from outside the Mercosur-Mexico, the Government was able to slow the advance of imports of vehicles, which account for 23.6% of sales in 2011. This year, this share fell to 20.8%.