General Motors to make R$600 million investment in Brazil
Date added: 1st June, 2010 at 11:18
(view all articles from June, 2010)
Categories: Economy
Car manufacturer General Motors is dedicating another R$600 million (£227.08 million) to complete its R$5 billion, four-year strategy for investment in Brazil.
The long-term plan has seen money go into modernising the company's plants and increasing their production capacity with a particular focus on updating the Chevrolet portfolio.
Sao Caetano do Sul plant in the state of Sao Paulo is the recipient of the latest funds, which are targeted at the development and production of two new models of vehicle.
"We have a very strong commitment to Brazil and are confident in the growth potential of the local economy," Jaime Ardila, president of the firm's Brazilian subsidiary said, adding that the money released for investment in Brazil "will enable us to take advantage of market opportunities".
Chevrolet is the largest portfolio in Brazil, comprising of 18 models, sales of which rose to an all-time record of 595,536 in 2009 - a 19 per cent market share.
The firm's Brazilian operation is its third biggest, after the US and China. It employs 21,602 people in three plants in Sao Caetano do Sul, Sao Jose dos Campos and Gravati and factories in Mogi das Cruzes, Sorocaba and Indaiatuba.
Brazil's automobile market - the fifth-largest in the world - is also significant for Fiat, Volkswagen and Ford, with production in the country leaping 14.2 per cent in April compared with the previous year to 290,000 units, according to Reuters.
Over the last four years, General Motors has ploughed money into the nation including R$1.4 billion spent on the enlargement of its Gravatai plant, R$600 million toward the development of new models, R$170 million funding the improvement of its sites in Sao Caetano do Sul and Indaiatuba and R$2.05 billion dedicated to the modernisation of one plant plus the development of three new vehicles.
One of the products that has come out of this investment is the Chevrolet Agile, a new model launched in October 2009.
This follows a Financial Times article that reported the burgeoning middle-class demographic in Brazil is driving further demand in consumer items such as cars.
Volkswagen has forecast a rise of seven per cent in sales in the country this year, while General Motors told the newspaper it predicted a five per cent rise.
"We believe five per cent annual growth is sustainable for Brazil over the next five years, with some upside given by the soccer World Cup in 2014 and Olympic Games in 2016," Mr Ardile said.
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