Lawsuit questions 1979 legislation that imposes a series of rules on the sale of new cars in Brazil; change can reduce prices and more
The Federal Supreme Court has set for March 4 the judgment that can profoundly change the structure of car sales in Brazil. The STF will analyze ADPF 1,106, under the rapporteurship of Minister Edson Fachin, which questions the constitutionality of the Ferrari Law (Law 6,729/1979). At the center of the debate is the possible liberalization of the sector, with the end of the requirement of brand exclusivity and territorial restrictions for concessionaires.
The legislation, in force for more than four decades, regulates the contractual relationship between automakers and dealerships. Critics point out that the current model creates an artificial market reserve, preventing competition and raising the final price to the consumer.
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Sanctioned in 1979 to balance power between global manufacturers and national retailers, the Ferrari Law establishes that a dealership cannot sell new vehicles of competing brands in the same sales hall. In addition, the rule imposes geographical limits on action and mandatory minimum stocks.
For experts in competition defense, these obstacles generate economic inefficiency. Lawyer Daniel Blanck argues that the logic of the law, although it sought to reduce the asymmetry of power in the 70s, today results in operating costs that are passed on to the buyer. Contractual rigidity is also seen as an obstacle to innovation, making it difficult for networks to adapt to digital sales and new business models, such as simplified direct selling.
On the one hand, entities such as Anfavea (manufacturers) and Fenabrave (concessionaires) defend the maintenance of the rules in the name of legal certainty of investments already made in the capillarity of the network. On the other hand, it is questioned whether the law violates the constitutional principles of free enterprise and consumer protection.
The scenario in the STF, however, is not simple. In an opinion issued in 2025, the Attorney General’s Office (PGR) expressed itself in favor of the constitutionality of the rule, suggesting that structural changes should come from the National Congress, and not from the Judiciary. If the STF decides, however, to overturn the articles that limit competition, the market may see the emergence of multi-brand resellers and a new price dynamic throughout the country.
