According to Cledorvino Belini, chief executive officer in Latin America, the newly merged Fiat Chrysler Automobiles has moved to begin exporting out of Brazil and into Mexico after a three-year pause.
The move was triggered by the continued low demand in Brazil, where the largest South American economy has faltered in recent years and a more favorable exchange rate than three years ago. Belini further clarified that Fiat’s last significant batch of Brazilian cars that were sent to Mexico was back in 2010, with a total of 15,000 autos. And with a weaker currency that favors exports, he also predicted that Brazil’s “real” which lost 12% so far this year to be valued at 2.68 per dollar, would continue its drop and hit 2.80 per dollar in 2015.
The move signals the shifting dynamics of bilateral auto trade between Latin America’s two largest developing economies – back in 2012 the strong Brazilian currency and surging economy led to a massive surge in cheaper imports from Mexico. Today, the massive drop in sales in Brazil, still counted as one of the first five global auto markets, has triggered a strategy reorganization for the carmakers that have localized production. For FCA, Belini previews sales would remain the same in 2015, after an 8% drop seen so far this year.