DESPITE REFORMS, BRAZIL'S BARRIERS STILL HINDER AUTOMOBILE IMPORTS

DESPITE REFORMS, BRAZIL'S BARRIERS STILL HINDER AUTOMOBILE IMPORTS

U.S., European and Japanese automakers eyeing Brazil's domestic car market will have to wait a while despite recently announced trade reforms that would facilitate such imports.

Since the government has blocked large private bank accounts to control inflation, some 80 percent of the money supply is frozen. As a result, auto dealers here figure, it will be some time before anyone has the ready cash to buy an imported car.And under the proposed rules, imported autos here will cost more than three times more than the basic sticker price in their countries of origin.

"It will be at least a year before our Brazilian playboy can import his Ferrari," Giulio Cesare Cortese, sales director at the Fiat Mirafiori dealership here, told The Journal of Commerce.

Cars and motorcycles are among the many items that can be imported on an unlimited basis under the provisions of President Fernando Collor de Mello's economic reform plan.

The plan, announced March 16, is designed to quash Brazil's chronic inflation, which hit a monthly record of 84.78 percent in March.

After toppling non-tariff barriers, the plan gradually would lower tariffs to exposeBrazilian industry to the rigors of international competition by the end of the current administration in 1994. The reforms still depend on Congress, which must approve them by mid-April if they are to remain in effect.

Many import rules remain undefined, but the tax burdens that any imports will carry are clear enough. Besides a stiff 65 percent import tariff, imported automobiles would be subject to the same taxes that already make Brazilian-made autos the most heavily taxed in the world.

Taxes account for 40 percent of the sticker price of a domestically assembled auto sold here. That compares with 6 percent for a U.S.-made car on a U.S. showroom floor. Brazilian auto taxes include a 33 percent industrial products tax for gasoline-powered vehicles and a 30.14 percent excise tax.

In the case of imports, both taxes would be figured on the basic sticker price for the country of origin, plus 2 percent for insurance, $600 for shipping freight and freight additionals.

Under these conditions, a Honda Civic, at $6,400 one of the cheapest cars sold in the United States, would cost $20,178 in Brazil. Add to that a dealer's markup of 13 percent to 16 percent, and you have the price to the consumer.

On a U.S.-made Ford Escort, the tariff and taxes cited above would drive the $7,400 basic price of a model with a 1.9-liter engine up to $23,040.

A Pontiac LeMans compact, with a base price of $8,000 in the United States, would cost $24,756 here. By comparison, prices for General Motors do Brasil's compact Kadette range from $18,483 to $30,333.

If Brazil's auto-import wall should fall completely, even the subsidiaries of the U.S. majors, General Motors Corp. and Ford Motor Co., probably will look to their European lines to import.

In the more rarefied price ranges, a Porsche 911 Carrera costing $71,333 in West Germany would cost $205,993 in Brazil. And a Ferrari Testarossa would soar from $147,000 in Italy to $422,540 on arrival at the ports of Rio de Janeiro or Santos.

At least for the cheaper models manufactured in Brazil, those prices are justified as keeping the local products - with their high tax load - competitive with imports.

Brazilian auto consumer tastes run more to a European look, and "it wouldn't do to bring in something that doesn't appeal to the local market," a Ford do Brasil spokesman said.