Source: O Estado de S.Paulo

The Brazilian government can impose sanctions to stop the indiscriminate entry of Chinese cell phones into the country, which exploded in 2011 and threatens the local industry. A survey by the Brazilian Association of the Electrical and Electronic Industry (Abinee) to which the 'State' had access shows that China's participation in imported cell phones jumped from 54% in February to 85% in August last year.

National manufacturers accuse the Chinese of unfair competition, as devices are being imported at a cost of US $ 12, while in Brazil the lowest cost of producing these terminals is US $ 38.

There is a suspicion that Chinese factories are using the export benefit granted by the Chinese government to gain space in the Brazilian market. The Ministry of Development, Industry and Foreign Trade is investigating the case.

Imported cell phones, which represented 9% of the base of handsets sold in Brazil in 2009, jumped to 20% in the first half of 2011 and must have reached 35% at the end of the year. In 2011, 57 million devices must have been sold, of which 20 million are Chinese, according to Abinee's calculations.

Targets. The main targets of complaints are Chinese Alcatel One Touch, Huawei and ZTE, responsible for 95% of Chinese cell phone imports, a source in the sector said.

The terminals with functions for two or three chips represented the largest volumes of foreign purchases in 2011, with a jump of 346% compared to 2010. “The large volume of cell phones imported from China are popular, with functions for two or three chips and are not entering the market at the price they are produced ”, reinforced the source.

In the Abinee survey, the lowest handset prices were those of ZTE, which had more than 40% of the 2,24 million imported cell phones at prices ranging between $ 12,44 and $ 16,67. Huawei recorded the highest value of imported mobile phones: US $ 82,1 million, followed by Alcatel One Touch (US $ 50,4 million).

Brazilian manufacturers question the low prices charged by these companies. “Component prices are commodities. If the components represent 80% of the cost, how does a device arrive in Brazil for US $ 12? The cheapest way to get is US $ 27, ”said the source.

The government is concerned about the significant increase in Chinese cell phones at low prices in the Brazilian market. The data presented by Abinee are being analyzed by the Ministry of Development.

“The import of cell phones has attracted attention, as it is outside the curve. We are studying what measures will be adopted to preserve the competitiveness of the national industry, in case it is found that these cell phones are entering the market in a harmful way ”, warns Nelson Fujimoto, secretary of Innovation of the ministry. According to him, several companies approached the Ministry of Development, reporting that US $ 12 refers almost exclusively to the cost of the battery

Reaction

Chinese companies reacted against accusations of unfair competition from domestic industry. The president of Alcatel One Touch, Marcus Daniel, told the State that the prices of handsets imported by the company are the result of big negotiations and the strategy of adopting a small profit margin and gaining volume.

“It is a legitimate strategy. Chinese importing companies can pay even more taxes than national ones, which even have certain incentives to produce in the country ”, said the executive. "We import by paying absolutely all taxes."

The executive says that Brazilian companies lost space in the market because they stopped producing popular cell phones, which despite the surge in smartphone sales, still represent about 75% of the market.

"If you do not offer cheaper devices, it is logical that you will lose 25% of the market", he provoked. “In my view, local manufacturers are wanting to have a market reserve and take away consumer options. This would be a bad deal for operators as well, ”he said.

The executive acknowledges, however, that the company adopted a more aggressive strategy in 2011. “We were more aggressive in terms of inventory, people, marketing, in everything. But it is nothing that puts the permanence of companies in the country at risk. Brazil is the ball of the day and everyone wants to have a stake in the country, ”he said.

He warns that if any action is taken against the import of cell phones, the consumer price will rise.

Contestation. Marcelo Najnudel, marketing manager for Huawei do Brasil's terminals area, disputes the import prices of mobile phones raised by Abinee. “The dollar FOB (reference price on imports) used by Abinee is not the value of the product's commercialization in Brazil. This value also includes import costs and others, which represent almost 60% more ”, he argues.

The executive maintains that, as long as all taxes due are paid, there is no unfair competition. Najnudel considers that it is even more advantageous to produce in China. “To compete on equal terms with the national industry, we would have to build a local plant. This is one of the plans, but until that happens, we will import. ” Sought for a week, ZTE did not respond.