Photo: BMW
The price war in Brazil enters a new chapter this year as tax incentives make buying premium cars easier and customers start to reconsider their options according to a report from Automotive News.
While the overall car market grew by a small 5 percent overall in the first quarter, the premium segment recorded a 32 percent increase according to two local auto associations.
That points in all sorts of directions, Mercedes-Benz and BMW being amongst the first companies to respond by dropping their prices or creating bundle packages that would attract more customers.
Up until now, the high taxation for import goods, especially cars labeled as ‘luxurious’ drove the prices way too high for average, upper middle-class buyers. However, recent changes in the fiscal policy changed the prospects.
That’s because the Brazilian law imposed a 30 percent tax increase on imported cars that didn’t have local factories. With the building of a new plant in Araquari, BMW managed to squeeze past that ruling, therefore dropping the price. That wasn’t the only way to make matters more attractive for the customers.
For example, BMW announced a couple of new models that have significantly lower prices than on other markets and are destined exclusively for the Brazilian front, rivaling offerings from Toyota or Honda that have been known to be cheaper in the past but now sit in the same price margin.
Furthermore, to drop prices even lower in the future, BMW and Mercedes announced that they will start building the cars locally in a few years. BMW’s plant, is scheduled to start production in fall this year, after an investment of €200 million. The cars built here will include (at first) the MINI Countryman, BMW 1 Series 5-door model, BMW 3 Series Sedan, BMW X1, and BMW X3.
That points in all sorts of directions, Mercedes-Benz and BMW being amongst the first companies to respond by dropping their prices or creating bundle packages that would attract more customers.
Up until now, the high taxation for import goods, especially cars labeled as ‘luxurious’ drove the prices way too high for average, upper middle-class buyers. However, recent changes in the fiscal policy changed the prospects.
That’s because the Brazilian law imposed a 30 percent tax increase on imported cars that didn’t have local factories. With the building of a new plant in Araquari, BMW managed to squeeze past that ruling, therefore dropping the price. That wasn’t the only way to make matters more attractive for the customers.
For example, BMW announced a couple of new models that have significantly lower prices than on other markets and are destined exclusively for the Brazilian front, rivaling offerings from Toyota or Honda that have been known to be cheaper in the past but now sit in the same price margin.
Furthermore, to drop prices even lower in the future, BMW and Mercedes announced that they will start building the cars locally in a few years. BMW’s plant, is scheduled to start production in fall this year, after an investment of €200 million. The cars built here will include (at first) the MINI Countryman, BMW 1 Series 5-door model, BMW 3 Series Sedan, BMW X1, and BMW X3.
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