U.S. based automaker General Motors is preparing a “drastic” number of layoffs in Brazil later this month, as the demand for new vehicles is still very low, an autoworkers union said, Dow Jones reports.
General Motors has already cut a total of nearly 2,000 jobs from the two factories in Brazil over the past year.
Now the company is seeking to curb production even further and may eliminate production of Corsa, Classic, Meriva and Zafira models at the Sao Jose plant.
PricewaterhouseCoopers (PwC) automotive industry analysis unit, Autofacts says the Brazilian auto sector has experienced “incredible growth” in recent years, and now represents the fourth-largest sales market globally.
But Brazil’s manufacturing activity stopped growing a year ago and has been contracting during the past six months. The ongoing manufacturing recession will be followed by a moderate recovery driven by government-induced incentives that will stimulate demand in the second half of 2012.
Economists cut their forecasts for economic growth in Brazil this year for the eighth straight week, to 2.05 percent from 2.18 percent, a central bank survey showed on Monday.
Brazil’s economy expanded 2.7 percent in 2011, down from 7.5 percent in 2010.