On July 5^th, 2018, the Brazilian president Mr. Michel Temer launched a new industrial policy for the automotive sector, a program called Route 2030 Mobility and Logistics. The program aims at the development of the country´s automotive sector by aligning the Brazilian productive strategy to the standards used by the main global producers.

Brazil boasts a robust automotive industry, which is responsible for 4% of the country´s GDP, and whose net revenue reached approximately US$ 60 billion in 2016, vehicles and auto parts combined. The sector exported US$ 19.7 billion in 2017 and imported US$ 18.9 billion, which resulted in a trade surplus of approximately US$ 800 million.

Route 2030 was designed with the objective of expanding the exports of vehicles and auto parts and mitigate the risks faced by the Brazilian industry such as low competitiveness, technological delay, and the risk of companies transferring production to other countries, which would result in loss of technical knowledge, investment, and qualified job opportunities.

Some of the measures proposed by the Route 2030 program, in this regard, are the concession of BRL 1.5 billion - approximately US$ 395 million - in fiscal incentives as a counterpart for the investment in research and development, the increase of the vehicles´ energetic efficiency, the incorporation of new technologies, among others.

The automotive industry in Brazil also benefits from the ex-tariff regime, which consists of a temporary reduction of the Import Tax applicable to specific products without equivalent production in Brazil. In May 2018, Brazil’s Chamber of Foreign Trade published the Resolution no. 28/2018, which included 12 items, mainly motor engines and motor parts, to the list of products that benefit from the regime.

Brazil´s main providers of auto parts are South Korea, Mexico, and Germany. The UAE occupies the 72^nd position in the ranking, having exported US$ 12,345 in 2017.

Since 2017, Dubai Exports office in Brazil has been developing trade opportunities for UAE suppliers of auto parts in the Brazilian market for large-scale imports by car insurance companies, mainly collision kits.  

Source: Ministry of Industry, Foreign Trade, and Services (MDIC)