Waiting Lists Show Brazil’s Hot Car Market Simmering
Executive Summary
Vehicle sales soared ahead of the scheduled Aug. 31 expiration of the discount on the industrial product tax, and waiting lists for some models reached up to three months. The government since has extended the tax cut through October.
SAO PAULO – General Motors and Fiat have waiting lists up to 90 days long for some models in Brazil’s booming car market, while Honda and Chery announce recalls.
With the discount on the industrial product tax for cars ending Aug. 31, there was a rush to dealerships and would-be buyers of some models were placed on waiting lists as long as three months. The government since has extended the tax cut through October.
Before the extension was announced, waiting periods reached 90 days for models such as Fiat’s Grand Siena sedan and B-segment Palio Sporting. There were 30- to 60-day waits for GM’s Chevrolet Cobalt sedan and Spin multipurpose vehicle.
After the government announced the reduction of the IPI tax in May, auto makers set up overtime schedules for workers, although they had sharply reduced production in the months prior to the discount.
In August, Fiat hired 600 employees to expand daily production from 3,000 units to 3,140 at its factory in Betim in Minas Gerais state. Work hours had been reduced before the IPI cutback. Work schedules at the GM factory in the Sao Paulo suburb of Sao Caetano do Sul have been extended by two Saturdays a month.
Other changes in the Brazilian market stem from recent legislation requiring new cars be equipped with antilock brakes and airbags by 2014.
Production of the Fiat Uno Mille minicar, which has been on the market for 22 years, will end by the beginning of next year. The B-segment GM Classic, launched 15 years ago, was about to be dropped before GM decided to add airbags for the ’13 version.
Coming off Brazilian auto makers’ record-setting August sales, Honda and Chery announce recalls.
Honda is recalling 11,100 CR-V SUVs to substitute the front-door locks as a precaution. Chery recalled 12,465 units of its Tiggo SUV and C-segment Cielo models owing to the “possibility that engine components may contain a certain quantity of asbestos.”
Asbestos is prohibited in vehicles in Brazil. Chery says in a statement that drivers and passengers do not face health risks because the components do not cause friction, which might spread residues.
“An investigation indicated the possibility that in some units sold in Brazil the presence of asbestos may be detected, as they are part of a series sent to Australia,” where the Chinese auto maker issued a similar recall, the statement says.
