Are we doomed to have ABS and airbags as optional extras?

Yesterday (September 15th), I watched Minister Mantega's press conference regarding the absurd measure of raising the IPI tax on imported cars by an average of 30%.

Mantega's argument is that he is concerned about the jobs generated by "national" manufacturers due to high inventory levels. But if inventories are high, it's because demand is weak, right? So, what can be done to stimulate demand, given that 75% of vehicle purchases are made through financing?

The first response is to reduce financing costs, and in this sense, the government took the first step by reducing the basic interest rate. However, this is still far from sufficient. The government should move forward in reducing the extremely high reserve requirement ratio, which, in Brazil, like the interest rate, is also the highest in the world (43% on demand deposits) and excessively increases the cost of capital.

We must consider that, if it weren't for imports, the prices of domestic products would be much higher and demand would be lower, resulting in less job creation in the sector. This is also because domestic production capacity is limited by low investment levels, especially in the production of basic inputs, such as flat steel, rubber (tires), etc.

Finally, it's not imported cars that are hindering sales of domestically produced cars, but rather the lack of incentives for demand through credit, since the middle class already comprises nearly 60% of the population and the car-to-inhabitant ratio is still high: 7,5/1. Furthermore, we must highlight the lack of quality in domestically produced cars, including in the area of ​​safety, because while imported cars offer ABS and airbags as standard equipment, it seems that we Brazilians are doomed to domestically produced cars that offer ABS and airbags as "optional" features, just like electric windows and power steering.