The current economic situation in Brazil is forcing General Motors to reconsider its plan for a new investment in the country, the company’s president recently said.
Brazil is going through a deep economic crisis that pushed the country in a severe recession and brought down the business environment. Its auto market was until recently one of the world’s five biggest ones, but cars sales have plunged, causing losses for all automakers. With such grim premises, many companies are taking a step back to reconsider their future plans in Brazil. General Motors said it would have to rethink its investment strategy if the local economic and political situation does not give any signs of improvement any time soon. “I hope to see political and economic advances in the next six to 12 months, which would allow us to stick to our investment plan,” the company’s president Dan Ammann told the Estado de Sao Paulo newspaper. If better days are not in sight, GM will re-evaluate, he said. GM announced last year that it planned to invest 6.5 billion reais ($1.62 billion) through to 2019 to help fund the development of new products, technologies and employee training, in addition to localizing components with Brazilian suppliers.
The Detroit-based automaker has five plants in Brazil, two of which make components for vehicles produced at the other three. Ammann said the company had no plans of closing either of them at this time and believes the Brazilian market still has potential on long term, but there are changes to be done to put the industry on the right track again. “The important question is to know when we will see the stability that allows us to continue investing. We are worried because the environment is unstable and the outlook is uncertain for the next few years,” he said.