Nano car price would be three times higher in Brazil due to taxes and fees


Source: O Globo Online, 27/03/2009

RIO - Tax expert and professor at the Getúlio Vargas Foundation, Francisco Barone did a study on car imports by Brazilian distributors. When consulted, he accepted the challenge of calculating how much the Nano - a car manufactured by Tata Motors in India and currently considered the cheapest in the world - would cost if it were imported by a company to be sold in Brazilian dealerships. The result is a price three times higher than that announced for the Indians: R $ 14.500. In India, the three-meter cart will cost $ 2.103,82, or about R $ 4.628,43.

The study carried out by Professor Barone considers taxes, freight for transportation, costs with dispatchers, the costs of the port and the margin of the dealer.

Despite the geometric price growth, imports would still take the most affordable vehicle on the market to consumers. The cheapest car in Brazil today is the Uno Mille 1.0 Flex two-door. In the automaker's table, without any option, it costs R $ 21.754, already with the IPI reduction. In a quick search of newspaper ads, you can still find it at a dealership for R $ 21.490. The price of Mille is 48% more expensive than the Nano would cost in Brazil.

Find out below how a car that costs the equivalent of R $ 4.628,43 (exchange rate to R $ 2,20), can arrive in Brazil at a cost three times higher, R $ 14.500.

To bring a vehicle from any part of the world (outside Mercosur) to Brazil, the dealer pays four fees to the State: Import Tax (II); Industrialized Products Tax (IPI); Tax on Circulation of Goods and Services (ICMS) and Additional Freight for Renewal of the Merchant Navy (AFRMM). According to Barone, for vehicles below 1.000cc, the well-known thousand cars, the rates of taxes are: II, 35%; IPI, 7%; ICMS, 12%, which corresponds to a percentage of 61,78% on the value of the Base Price of India. The AFRMM is equivalent to 25% of the value of sea freight, which in turn is equivalent to 3,5% of the price in India. The result is an additional R $ 4.158,37.

In order to receive the car in a Brazilian port, Barone explains that it is necessary to clear it, that is, go through all the bureaucracy of the Federal Revenue for import, pay dispatcher, fees, warehouse for clearance of the vehicle, handling in the port and other operating costs . This represents another R $ 571,97.

Until then, the car would cost R $ 9.358,77. But an important cost is missing, the importer's margin. Within it is not just your profit, but the cost of maintaining utilities, the distribution network, other taxes and your employees. Today, it averages 35,46%, according to Barone. Which gives R $ 5.141,23.

In the end, adding all these costs, the car would cost R $ 14.500.