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13 AutoData | February 2019 “During the final approval phase of Rota 2030 there was a discussion about local incentives, which was a very big strategic mistake. The industry lost credibility.” to produce in Brazil to export to Latin America, but it is almost impossiblewith the current rules. Volkswagen, Audi’s factory partner in Parana, is making an investment of R$ 1,4 billion to produce the T-Cross there. Can it benefit Audi somehow? That is very good for us. (silence) The T-Cross’s platform, the MQB, is also applied on Audi models, right? All of our vehicles with a transverse en- gine are MQB. Nowadays, what is the production ca- pacity of Audi at the factory in Sao Jose dos Pinhais? 26 thousand a year. We are far from achieving it, we made six thousand in 2018. We are not worried about lack of capacity (laughs). I’d like to have that problem, to be honest. So, according towhat you say, Audi’s fo- cus is in Brazil’s domesticmarket, but the premium segment is highly competitive and has decreased a lot. Howto balance that equation? The Inovar-Auto rules have favored lo- cal production in Brazil but today, now, the reality has changed a lot: we have four factories that fight for 50 thousand customers a year, which is certainly not the best scenario. We expect that the market will get better, but it is going to take a while. Something has been said about 100 thousand units for the premiummarket a year in Brazil... I think it is a possible number, but I repeat that it will take awhile. Anyway, 2018was very good for us, we reached all of our goals, not necessarily in volume but that was not our priority now. We certainly made an initial planning with a much larger volume than the current one, four, five years ago, andwewere not the only ones. Now we are in a different course, we changed the waywe work internally You have already expressed non-confor- mism for not being able to export Audi models from Brazil to Argentina, but a competitor of the same segment in Brazil has already exported from Brazil to the United States. What is the difference? I have already had a similar experience in the factory in Sao Jose dos Pinhais, when we exported the Golf model from there to the United States, and I can guarantee that it wasn’t because our production in Brazil is more competitive than in Ger- many. The point is that you close a fac- tory or you don’t, you get people fired or you invent something to not necessarily close a factory or part of it. Does that picture come from a merely cost issue or there are other complica- ting factors? By a matter of bureaucracy, that gene- rates cost. For example: there is a dra- wback system in Brazil in which we pay the import tax of a part to later receive a credit when we export that part inside a car. That is a very long and complica- ted process. In the European Union, you already import the part with no taxes because it will be exported later, you just declare it and that’s it. In Brazil, we need ten people to let the part in and then leave the country. Also, there are the homologation rules of each country, there is one in Brazil, another in Argen- tina, a third one in Uruguay... it is unfea- sible to do that whole process to export one hundred units to one country, three hundred to another. I would really like