Why should've Volkswagen kept the air-cooled boxer engine for a longer time in Brazilian front-engined models at least as an option?

Volkswagen used to be the best-selling automaker in Brazil for some decades, with some models having been developed specifically for the regional market, such as a 2-door bodystyle in the 2nd generation of the Parati compact station-wagon, in a time when Brazilians were starting to become more favorable to 4-door cars in the mid-'90s despite a more conservative part of Volkswagen's local customer base still being more fond of the 2-door models. That was also a time when 1.0L-engined cars became prevalent due to a more favorable (or less unfavorable) taxation, which former president Itamar Franco amended to allow air-cooled engines up to 1.6L to be eligible for the same benefit which remains in effect for the water-cooled 1.0L engines. Much has changed regarding engine technology, and some approaches such as 4 valves per cylinder which failed in the '90s due to poor maintenance became more usual in recent years, but a more "dumbproof" engine such as the good old air-cooled boxer could've soldiered on a little more...

While the 1.0L engines were much more relevant in Brazil than in other regional Latin American export markets, from the 16-valve which was the only within its displacement bracket fitted to the Parati to the 8-valve which soldiered on for longer in the Gol, and export markets favored 1.4L through 1.6L engines much more, eventually the air-cooled boxer would still remain more relevant in Brazil had the lower tax bracket remained effective after '96 in that very same context of "People's car" which led to the rise of the 1.0L class to reach around 70% market share in the early 2000s in Brazil. What has led Volkswagen to give up on the boxer in late-2005 were the Euro-3 emission regulations, mostly concerning the noise, and a lower production volume rendered the investment to make a flexfuel version exclusive to Brazil unjustifiable, as that engine had already been phased out in Mexico in 2003, so the 1.4L 8-valve version of the EA-111 engine effectively took over the role of the air-cooled boxer in commercial vehicles and also had an increase to its presence in regional export markets where the 1.0L would seem even harder to justify. Sure the air-cooled boxer could also seem hard to justify because of its age, yet being such a well-proven powerplant with fewer parts to break would still have its appeal among some buyers who tended to neglect maintenance, and for a front-engined vehicle the improved air flow would lead to a more efficient cooling than in older rear-engined models.

Technically simpler, with a better low-end torque than some 1.0L water-cooled engines which took its role in the "People's car" segment in Brazil, the air-cooled boxer also had its advantages compared to a water-cooled 1.6L straight-4 in longitudinally-engined models such as the 3rd-generation Gol, because a shorter engine which also happened to be lighter tended to weight distribution and decrease structural efforts to the unibody. Of course relying on an aluminium-magnesium alloy was quite troublesome due to cost compared to straight-4 engines with a cast-iron block, not to mention air-cooled engines usually resorting to a richer air-fuel ratio to assist with cooling, even though in a front-mounted application it would eventually be suitable to an oil-assisted cooling more similar to what BMW used to apply to the R-series motorcycles. So, even though the air-cooled boxer was seemingly outdated at a first glance, it still could have soldiered on for longer, at least until Volkswagen got rid of longitudinally-engined cars in Brazil only in 2013...