The Japanese automaker is postponing for now the start of production at Honda’s new plan in Brazil, Bloomberg reports.
As Brazil’s economy has been under a lot of pressure lately, many automakers are reconsidering their local investment strategy. Honda was initially targeting to double its production in the country to 240,000 vehicles per year, but the gloomy perspectives of the market are forcing the company to take a step back. Honda is currently building a new plan in Itirapina with the intention of starting the output process in the first half of the year. However, the company will now wait until there are some signs of recovery in Brazil, Roberto Akiyama, Honda’s vice president for South America, told Bloomberg in an interview. The analysts see sales in the country falling 7-8 percent this year, but Honda predicts its deliveries will take a deeper plunge in 2018, expecting to decrease by 18 percent.
The deep economic crisis that pushed the country in a severe recession and brought down the business environment also made General Motors re-evaluate its plan, after it announced last year that it planned to invest 6.5 billion reais (1.62 billion dollars) through to 2019 to help fund the development of new products and technologies. In contrast, Mercedes-Benz kept to its commitment and officially opened a new site at Iracemapolis in the Sao Paulo metropolitan area this week, where it has already started the output.