Gurgel, Brazil's homegrown carmaker, went bankrupt when its tax break went to everyone

João Augusto Amaral Gurgel founded Gurgel in São Paulo on September 1, 1969. The company first built buggies and off-road vehicles with a trademark plastic-body technology called Plasteel, later expanding to electric vehicles and city cars. By 1989, Gurgel employed 1,150 people and was Brazil's only 100% nationally-owned automobile manufacturer.

In 1988, Gurgel launched the BR-800, the first car fully designed and manufactured in Brazil. It was a small city car with a 792cc Enertron flat-twin engine (a halved Volkswagen flat-four), Plasteel body, and an unusual sales model requiring buyers to also purchase 750 shares in the company. The government had granted a reduced IPI (industrial products tax) rate of 5% for sub-1,000cc cars, which Gurgel had lobbied for and was uniquely positioned to benefit from. About 40,000 BR-800s were built.

In 1990, the government extended the same IPI reduction to all cars below 1,000cc, allowing Fiat, Volkswagen, and Ford to launch cheaper 1.0L models. Gurgel's sales collapsed. A planned mass-market car, the Delta, was to be built in a new plant in Ceará with US$30 million in state funding and US$25 million from BNDES, but governor Ciro Gomes withdrew the support.

The company entered preventive bankruptcy in 1993 and collapsed on March 1, 1994. Its doors closed permanently at the end of 1994, and the company was officially declared defunct on September 30, 1996. The trademark was later sold to a small importer of tricycles. João Gurgel publicly blamed Governor Ciro Gomes for the bankruptcy.