Fiat plans to invest $7 billion by 2016 in Brazil, according to CEO Sergio Marchionne.
Brazil is Fiat’s second largest market after Italy and CEO Dan Akerson has already informed Brazilian president Dilma Rousseff about this investment during a meeting in Brasilia. He said that the investment will be used to expand production of cars, trucks, engines and heavy equipment. Marchionne also said that a new Iveco plant will be built to manufacture military trucks.
According to auto maker association Anfavea, Fiat is Brazil’s largest automaker in terms of sales. In 2012 the automaker sold 596,860 vehicles in Brazil, while rival VW sold 591,038 vehicles, GM sold 529,270 units and Ford sold 244,065 units. Fiat’s spokesman, Roberto Baraldi, said that this investment will not include Chrysler, as the company does not have enough scale in this region to warrant local production.
Last week VW’s Audi said it will not build a new plant in Brazil until the local laws are clear and transparent. Brazil is the world’s fourth largest car market in the world and as expected most of the automakers are opening factories there to avoid high taxes and tariffs on imported vehicles. In 2005, Brazil exported almost 900,000 vehicles, but last year the country exported only 442,000 vehicles and imported about 795,000.
Source: The Wall Street Journal