Brazil’s new car prices are set to gradually rise starting Thursday as a nearly year long tax benefit draws to a close.
The industrial production tax, or IPI, was cut by the federal government in December in an effort to curb a rapid decline in car sales spurred on by the on rushing global credit crunch.
Car sales quickly recovered as auto makers passed on the IPI savings to consumers, resulting in as much as a 7.4% reduction in sticker prices on new vehicles.
“Our expectation is that the return of the IPI tax can gradually be absorbed by the market,” Rogelio Goldfarb, corporate affairs director for Ford Motor Company (F) in Brazil told the local Estado news wire on Tuesday.
“Of course, the return of the tax means higher costs for the consumer,” Goldfarb added.
Car sales are expected to hit or top 3 million vehicles in Brazil this year, according to calculations made by the Brazilian Automotive Vehicles Manufacturers Association, Anfavea. In 2008, Brazil sold around 2.8 million vehicles.
-By Kenneth Rapoza, Dow Jones Newswires
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In a report released Tuesday, Brazil’s Federal Auditing Board, or TCU, found “major irregularities” in 63 public works projects, recommending a complete halt to work at 41 sites and a partial halt at 22.
The report was filed by the TCU with the Joint Budget Committee of Brazil’s Congress. The committee will review the report and can order full or partial suspension of work at any of the sites reviewed by the TCU.
The TCU report is an annual affair. Last year, the panel reviewed 153 projects, finding irregularities in 48. This year, the TCU reviewed 219 projects.
This year’s report found irregularities including overcharging by suppliers, signing of contracts with sub-contractors without proper bidding procedures, unwarranted cost overruns and many others.
A number of major projects could face at least a partial halt in construction activities. These include a major expansion of facilities at Sao Paulo’s International Airport and modernization work at oil refineries in the northeastern state of Pernambuco and the southern state of Parana.
-By Tom Murphy, Dow Jones Newswire
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Daimler (DAIGn.DE) will hire 800 more staff for its Brazilian commercial vehicles business and keep open a U.S. truck plant as the two key markets show signs of reviving, the world’s biggest truckmaker said.
The moves offer a glimmer of hope for commercial vehicle manufacturers slammed by the global economic and credit crisis and could signal a broader uptick because truck sales often act as a leading indicator of economic health.
But industry officials have warned against expecting any quick rebound for truckmakers until the global economy accelerates and boosts demand for goods transport.
“The hiring of new staff makes clear that we trust the Brazilian economy will see a slight upturn after the global economic crisis,” Mercedes-Benz do Brasil President Gero Herrmann said in a statement released in Germany. (more…)
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Brazil’s government is facing rising criticism at home over its handling of the Honduran crisis as senior lawmakers accuse it of allowing the ousted president to use its embassy as a political platform.
Manuel Zelaya, who was toppled as Honduran president by a coup in June, has virtually taken over the Brazilian embassy with dozens of supporters and has given numerous interviews to foreign and domestic media.
His sudden return from exile a week ago triggered violent protests in the capital Tegucigalpa and placed Brazil at the center of the Honduran power struggle and an international diplomatic crisis.
Government and opposition legislators in Brazil’s Congress have urged President Luiz Inacio Lula da Silva to curtail Zelaya’s political engagement in the embassy. (more…)
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Unions and bankers will make another attempt to bring Brazil’s week-old bank strike to an end with a new set of talks set for Thursday morning, said spokesmen for both sides on Tuesday.
The nationwide?strike has had spotty effects, with banks operating normally in small states and rural areas but shutting down many banking operations in big cities.
So far, the strike has had little effect on financial exchanges. Effects on consumers are varied, with many able to use electronic transfers and automated teller machines but others inconvenienced by the inability to pay bills or take out loans.
Unions are demanding a 10% wage?hike, revisions in profit-sharing agreements and job guarantees from banks in the event of future mergers or acquisitions. Representatives of the National Bankers Federation have offered a 4.5% wage hike, in line with the current inflation?rate, and minor changes to profit- sharing plans.
By Tom Murphy, Dow Jones Newswires
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