One Litre Car Sales Soar in Brazil Says just-auto.com

    LONDON, Feb. 21 http://www.just-auto.com -- The market
share today of one-litre models in Brazil has soared to 73.5% compared with
just 4.3% 10 years ago.  This growth is the result of a special industrial
product tax (IPI) which is applicable only to one-litre models known as
"popular cars."
    The report on the Brazilian market at
http://just-auto.com/features_detail.asp?art=446 says that while cars with
one-litre engines pay just 10 percent IPI tax on top of the ex-factory price,
vehicles with larger engines pay 25 percent.
    The one-litre car, which now dominates the Brazilian car market, can thank
a decade of special IPI taxation and competitive prices for its success.  A
basic model can cost $US 4,000 less than the equivalent with a larger engine
-- and the basic models are now much better equipped.  When they were first
launched in 1990, "popular cars" had only essential equipment -- not even a
cigarette lighter -- but now they are becoming more luxurious.
    One-litre models that enjoy the benefits of the special IPI tax in Brazil
include the unique one-litre Ford Ka with locally made engine, Ford Fiesta,
Volkswagen Gol, Renault's Clio and Twingo, Peugeot 106, Hyundai Atos, and the
Chevrolet Corsa and Celta.
    The special PI tax benefits encouraging the purchase of one-litre cars in
Brazil has meant automakers have developed special models for the market.
However, if the Brazilian National Automaker's Association has its way, the
engine size-related tax may be abolished.

    For the full report see:
http://just-auto.com/features_detail.asp?art=446

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