The National Government, through a productive table, will generate an agenda to promote policies to encourage the Ecuadorian automotive industry.
Representatives of this sector met on March 19 with state authorities. The Minister of Production, Foreign Trade and Investment, Pablo Campana, proposed to work in parallel on the impulse of the auto parts sector (parts and pieces) “to have more local content and more industries to export”.
That State portfolio raised to the Ministry of Economy, at least 25% reduction for the Foreign Currency Exit Tax. This aspect is now under feasibility negotiations. As a result of the event, four technical round tables were created that will monitor points on taxation, customs and public procurement.
David Molina, executive director of the Chamber of Automotive Industry (Cinae), said the sector has some challenges in 2019 related to a major cut in its production by at least 28%. Therefore, it considers necessary an evaluation and correction of the tariff for CKD (assembly kit) of 13% in current investments.
The businessman, in statements to this newspaper in February, said there is “an illogical counterpart,” so you cannot compete. While for the Ecuadorian industry 2% of tariffs were reduced; for vehicles imported from Europe the decrease was 5% (due to the commercial agreement of the European Union). “If there is no comprehensive policy, it expects that this year the sector will close with sales of about 125,000 vehicles, of which less than 20% will be locally produced,” said Molina.
It recognizes the Government’s support for the new investment projects, which since this year pay 0% tariff on CKD materials. But Molina warns that if the problems are not corrected in the short term, new investments would be at risk. (I)