Associations criticize SKD system tax, when parts come from abroad and nothing is manufactured in the country; They are at risk to the government’s own jobs, production and programs
The (Brazilian Auto Parts Industry Association) and the (National Union of the Automotive Vehicle Components Industry) sent this Monday (28.Jul.2025) a letter to the President (PT) to express repudiation of the possible reduction of import rates on SKD (semi knoocked down) and CKD (Completely Knocked Down (SKD vehicles).
According to the document, the measure weakens the national industry and favors foreign manufacturers, especially Chinese. Read A (PDF – 237 KB) of the document signed by the president of Abipeças and Sindipeças, Claudio Sahad.
The letter was also sent to other members of the government, such as Vice President and Minister of Industry and Commerce, (PSB), Finance Minister, Industrial Development Secretary Uallace Moreira, and Foreign Trade Secretary Tatiana Prazeres.
Understand
The claim, which is under review at Camex (Foreign Trade Chamber), was made by BYD itself and can be voted on Wednesday (30.Jul), at an extraordinary meeting of GECEX (Executive Management Committee).
The Chinese automaker asked the government to reduce the import tax of SKD and CKD kits, 5% for electric cars and 10% for hybrids. Current rates are, respectively, 18% and 20%.
Entities claim that the measure would create a “Unusual competition” with vehicles produced in Brazil and would configure a “Unjustified tax renunciation”besides causing chain effects.
“The harmful combination of these factors will unquestionably cause a drop in production and loss of jobs for the Brazilian auto parts industry, as well as inevitable revision of the investments announced by automakers and our sector.”says an excerpt from the letter.
According to associations, imports of Asian vehicles increased by about 190% by 2024 and remain in the rise trajectory, favored by a gradual recomposition of the rates.
The document also states that the eventual granting of the benefit contradicts Lula government programs that aim to stimulate the competitiveness of national industry, such as (green mobility and innovation).
The entities ask Lula to bar the request and warn of the risk of the decision to pave the way for new similar claims by other automakers.
Sought by Poder360BYD did not respond until the publication of this report. The space remains open for manifestation.
Support of great automakers
The letter sent by the supplier chain reinforces concerns already presented by the four main automakers installed in Brazil. On June 15, the presidents of Volkswagen, Toyota, Stellantis and General Motors also positioned themselves against the measure in joint letter to Lula. In the text, they predict the revision of at least R $ 60 billion in investments and point out risk of dismissal of up to 50,000 workers in the automotive chain if the government leads to the decision.
The automakers argue that the SKD system – in which vehicles are brought to Brazil almost ready and only assembled in the country – generates few jobs and practically does not involve local suppliers.
BYD Benefit
The main beneficiary of the measure would be the Chinese automaker Byd, who invests in a plant in Camaçari (BA), a state where Rui Costa (PT), current minister of the Civil House and former governor, made a political career.
The proposal is coordinated by Rui himself at the request of the Planalto Palace, which has generated discomfort in the automotive sector.
