BRASILIA, Brazil, Nov 28 (Reuters) - Brazil's government on Friday said it would extend by three months a tax cut for car makers meant to bring consumers lower prices and prevent further industry layoffs.
The measure is aimed at helping the industry recover from a sharp downturn in auto sales that led to a round of job cuts at automakers this year, including nearly 4,000 at Volkswagen AG in July.
Brazil's center-left government will cut the amount of IPI tax auto makers pay on cars by three percentage points for the next three months, having begun the concession in mid August.
In return for the tax break, auto makers cannot fire workers and are expected to pass cost savings on to consumers.
Brazilian auto sales rose between September and October
The move is part of President Luiz Inacio Lula da Silva's efforts to revive the stagnant economy. He has also unveiled new loans for small farmers and measures to give poor Brazilians better access to credit.