Geraldo Alckmin says the automotive sector will invest R$100 billion by 2029

Investment

Measure will increase the national fleet of electric and hybrid vehicles

The Brazilian automotive sector is expected to receive around R$100 billion in investments in the coming years. The number, presented by representatives of the National Association of Motor Vehicle Manufacturers (Anfavea) to the vice-president of the Republic and minister of Development, Industry, Commerce and Services (MDIC), Geraldo Alckmin, was released this Wednesday (7) by minister in interview.

Alckmin met on Tuesday (6) with the president of Anfavea, Márcio de Lima. During the meeting, the leader said that the total to be invested in the Brazilian automotive industry will be greater than the R$41.2 billion announced the previous week.

“In the meeting I had with representatives from Anfavea, the expectation of a total of R$100 billion in the coming years was announced, probably by 2028 or 2029. Both in light and heavy vehicles, such as buses and trucks. Both in combustion and ethanol engines, total flex, hybrids and electric”,

Alckmin said.

According to Alckmin, “it will be a record investment”, which will result in the construction of at least four factories.

“We already have an electric bus factory. We will also have two electric car factories. There are two automakers. BYD [empresa chinesa que assumiu o complexo industrial que pertenceu à Ford] in Camaçari [BA]; and GWM [Great Wall Motors, também chinesa], in Sao Paulo. But others will come,” she added.

The minister recalled that the automotive sector has, among its advantages, that of stimulating a long chain of products that benefit everything from the steel and glass industries, to tires and auto parts, “generating a lot of jobs and adding a lot of value”.

“This will be facilitated by the recovery of the economy”, said the minister, highlighting that these investments are stimulated by initiatives such as the National Program for Green Mobility and Innovation (Mover), which expanded sustainability requirements for the national automotive fleet, so to enable the decarbonization of vehicles through tax incentives.

“Two pieces of good news will increase sales in the automotive industry. The first is the fall of the Selic [taxa básica de juros], which should remain. The other is the Guarantee Framework, approved by the National Congress. That is, if [uma empresa] sells a car and the person doesn’t pay, now with the Guarantee Framework you can get the car back”,

argued Alckmin.

Gradual reinstatement

In the interview, Alckmin reiterated the government’s justifications for the gradual reinstatement of payroll in 17 sectors of the economy. According to him, the government’s concern is with fiscal responsibility, aiming for the goal of zero primary deficit.

“There is an important tripod for the economy: interest, exchange rate and tax. Tax reform brought economic efficiency to the country. The exchange rate, at R$5, is good for exports. We also need to lower interest rates, which are already falling 0.5 percentage points per month”,

he said.

“The concern of [ministro da Fazenda, Fernando] Haddad, of not running a deficit, is therefore correct. There were 17 sectors, but they included municipalities. Then the cost doubled from R$9 billion to R$18 billion. It’s a question of constitutionality. To give up R$9 billion, you have to inform what will be cut or what tax will be increased. The concern is fiscal and legal”, he argued.

The minister said he believes that everything will be resolved through dialogue, and that negotiations will return after Carnival. “Our expectation is dialogue, and President Lula is a master of that,” he added upon leaving the interview.

*With information from consultancy

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