Nothing like having a government to spur competitiveness in a market economy… 

Following our last week’s post about Chinese automaker JAC Motors slump in Brazil car sales, BMW posted a 30% drop in first-quarter sales in Brazil due to the IPI tax rise for imported cars, said Henning Dornbusch, the company’s country head.

“Car sales fell 30% due to the IPI raise,” Dornbusch said to Bloomberg. “We’ve partly compensated it by raising prices 15.9% in average, with BMW and dealerships absorbing the rest.”

Though BMW’s chief seemed angry about a month ago by threatening to withdraw its manufacturing plans in Brazil, he seemed softer in his words now…

“BMW sees Brazil as a country with a very, very big potential,” he said. “China is in the center of our radar, but Brazil is just hovering around it.”

The company sold 1,888 units in Brazil in the first quarter, down from 2,137 units a year earlier. Total car sales in Brazil, the world’s fifth-biggest vehicle market, fell 0.6 percent to 772,755 in the period.

“When we have all the changes mapped out, we’ll decide whether to go on or not with the factory plan. Our interest in Brazil is really big, but it all depends on the business case. We’re not here to lose money.”

Last year, according to Dornbusch, BMW sold 12,422 units of its BMW-brand cars, 2,792 units of the Mini-brand and 5,442 BMW motorcycles. The Brazilian car industry sold 3.42 million total cars last year, according to Fenabrave.

Not yet the 20th biggest market for BMW, Brazil is attractive to it alongside China, Russia and India, due to its plentiful resources, investment inflows and rapidly growing middle class, Dornbusch said.

Source: Bloomberg

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