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Chery wins temporary tariff exemption in Brazil

By Yan Pei
0 Comment(s)Print E-mail China.org.cn, September 28, 2011
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Chery Automobile Co. has won a 90-day delay on Brazil's newly raised automobile import taxes. [File photo]

Chery Automobile Co. has won a 90-day delay on Brazil's newly raised automobile import taxes. [File photo]

A Brazilian federal court granted Chinese automaker Chery Automobile Co. 90 days' delay on the country's newly raised automobile import taxes, the 21st Century Business Herald reported Wednesday.

On Sept. 16, the Brazilian government hiked taxes on imported cars by as much as 30 percent to protect its auto and auto parts industries. A tax rate of between 37 to 55 percent will be levied on imported cars that are assembled primarily with foreign-manufactured parts, up from the previous rate of between 7 to 25 percent. As a result, prices of imported cars in Brazil will rise by 25 to 28 percent.

Chery filed a lawsuit over Brazil's tax increase within 48 hours of its announcement. The federal court in the state of Espirito Santo, through which Chery imports cars, issued an injunction that grants the automaker a temporary reprieve from the higher import tax rate until Dec. 15.

Chery broke ground on a factory in Brazil in July of this year in a bid to shield its cars from trade barriers.

Lu Jiankang, Chery's chief representative in Brazil, said the company has contacted the Chinese Chamber of Commerce and China's Ministry of Commerce, who will negotiate with the Brazilian government on the matter through diplomatic channels.

Chery will readjust its sales target in the Brazilian market for after the new tax goes into effect, Lu said. Chery previously planned to sell 50,000 vehicles in Brazil in 2012 and 80,000 in 2013, Brazilian media quoted Chery Brazil CEO Luís Curi as saying.

China's business press carried the story above on Wednesday.

 

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