The retail prices of cars in 2023 in Ecuador could register a general increase of 3%, due to the behavior of the global economy. Inflation, production costs, which have to do with energy (for example, in Europe), logistics costs, lead to the general increase. In this way, the 2023 would be the second consecutive year of price increases, since in 2022, according to the INEC, an increase of 2% in prices was already felt. This was reported on January 11 by the Association of Automotive Companies of Ecuador (Aeade).
Genaro Baldeón, executive president of this union, said that from From 2016 to 2021 the price trend had been downward, and these had fallen by 15%. However, between 2021 and 2022 the costs rose, although the sale to the public only registered an increase of 2%. Currently, depending on the origin of the vehicles, technology and models, the increase is seen to exceed 6%. Not all this rise translates into the price to the public.
Despite these increases, andl 2022 was a record year for sales, reaching 139,517 units sold, a figure that almost equals that of 2011, which was a historical figure. On the other hand, in 2023 it is expected to sell more than 143,000 units.
Baldeon pointed out that Ecuador’s tariff and tax policy makes prices even more expensive, comparing them with the prices of neighboring countries in a 20%, 30% and up to 50%. Baldeón welcomed the government’s policy of accelerating the recently announced lowering of the tax on foreign exchange outflows (ISD), but commented that it does not have greater relevance compared to, for example, 40% of tariffs and the tax on special consumption that goes from 5% to 35%. This added to VAT (12%) makes prices more expensive.
In any case, the automotive sector has already submitted to the Government a proposal to rationalize the tax burden through two components: lower tariffs and reduce taxes for the automotive sector and that is being analyzed in the productive tables.
He explained that until 2007, the ICE was at 5.15% and Aeade’s approach is to return to reasonable levels, like those before 2007, when there was a flat rate. “We know that there is going to be a fiscal analysis and that the Government must make its calculations, but we know that there is a willingness to carry out this analysis,” Baldeón maintained. The expectation is that there will be a review and that the tax will not exceed 10% or 12%.
The second component of the proposal is the tariff part. He explained that Ecuador currently has a tariff that is totally out of the market when compared to other countries in the region.
For example, in Chile it is 6% in theory, although in practice it does not reach 2% due to the trade agreements it maintains. In Peru it is 9%, but likewise the amount actually charged does not exceed 3%. In this sense, he said, it would be convenient for the tariff not to exceed 20%. Even this would make it possible not to generate market distortions, since there would be too wide a gap; In certain blocs (such as the European one) or countries in which agreements will already be made, tariffs would reach 0% and with other countries they would remain at 40%. (YO)
Source: Eluniverso
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