GM announces $2.8 billion investment in Brazil image

After making the headlines mostly because of its ongoing debacle with the defective ignition switch recall and the ensuing public scandal, General Motors finally catches our attention with a big investment announcement.

Chief executive officer Mary Barra announced the No. 1 US automaker has a planned investment of 6.5 billion reais ($2.8 billion) in Brazil, to be spread over the next five years. The news comes as a signal of confidence in the largest South American car market, even as vehicle sales in the local region have reported sharp drops in recent months.

“We recognize that there are challenges right now, (but) over the midterm and long term we see great prospects in the Brazilian market,” commented Barra.

The domestic auto industry in Brazil, accounting for a fifth of the nation’s manufacturing output has cut production by around 16% since the start of the year, sending home in the process thousands of employees. Barra made the announcement during a recent visit in Brazil, where she also met President Dilma Rousseff. The CEO told reporters on site that the company plans to spread the cash for new product and technologies development, as well as factory maintenance. The executive also acknowledged government backing, in the form of tax incentives and better credit conditions.

Via Reuters