Brazil: Fiat/VW/GM set to sell 1 million autos each in 2014

Toyota to build a new plant in Brazil, Honda in Argentina, to produce small-sized cars

2011/01/28

Summary

 Below is a summary of recent market trends in Brazil and Argentina.

 The new vehicle sales in Brazil in 2010 reached 3.52 million units, including medium- and heavy-duty commercial vehicles, and outnumbered sales in Germany (3.15 million units) to become the fourth largest market in the world after China, the United States and Japan. The top four automakers, namely Fiat, VW, GM and Ford, represent 73.8% of the passenger car and LCV market in 2010.

 The automakers are increasing production capacity and development capability believing that the Brazilian market will continue to grow. Fiat, VW and GM anticipates selling one million units each in Brazil in 2014 while Fiat announced it will invest 10 billion reais (4.4 billion Euros) in total in the next five years, the largest amount among the four.

 Toyota has begun construction work of its second plant to produce small-sized cars starting in the second half of 2012. Toyota reportedly has decided to produce small cars that are suitable for the Brazilian market where Japanese automakers have been suffering from sluggish sales due to higher prices, such as Toyota Corolla and Honda Civic/Fit, compared to the mass-marketed models in Brazil (in the range of about 30,000 reais).

 Hyundai Motor and Chery Automobiles are planning to start additional production in Brazil in 2013 while Anhui Jianghuai Automobile began export sales toward the end of 2010.

 In Argentina a total of 720,000 vehicles were produced and 700,000 vehicles sold in 2010. Honda has built a new plant and will start production in the first half of 2011. Ford will invest $250 million to produce new models.

Major automakers' plans for Brazilian market

  Period Investment Goal
Fiat 2011-2014 10 billion reais (4.4 billion Euros)  Building a new plant in the state of Pernambuco with annual capacity of 200,000 vehicles. Increasing capacity of the existing Minas Gerais plant from 800,000 to 950,000 units. Planning to sell 1 million units in 2014.
VW 2009-2014 2.3 billion Euros  Investing to increase production capacity and new product development to sell 1 million vehicles in 2014.
GM 2008-2012 5.0 billion reais ($2.8 billion)  Investing to increase production capacity and new product development anticipating sales of 1 million vehicles in 2014. Starting production in the new engine plant in 2012.
Ford 2011-2015 4.5 billion reais ($2.4 billion)  Investing to increase production capacity and new product development. Developed the next-generation EcoSport (small-sized SUV produced in Brazil) in Brazil.
PSA 2010-2012 530 million Euros  Enhancing facilities at Porto Real plant for producing new Peugeot/Citroen brand models and engines. Has medium-term plans to produce 500,000 units in South America.
Hyundai Motor by 2013 $750 million  Building a new plant with annual capacity of 150,000 units to produce small-sized cars based on the Hyundai i20 starting in 2013 if all goes well.
Chery Automobile by 2013 (first stage) $400 million  Building a new plant in the state of Sao Paulo to start producing 50,000 units a year in 2013 with plans to increase the production scale to 150,000 units in the future.
Anhui Jianghuai Automobile starting from December 2010    Export sales of cars and SUVs began in December 2010 with plans to sell a sum total of 620,000 units by 2020.
Japanese automakers' plans
Toyota 2010-2012 $600 million  Building its second plant in Brazil to produce, in the second half of 2012, the small-sized vehicles based on the Etios introduced in India toward the end of 2010.
Nissan      Production started in 2009 of the Livina series models at Renault's Curitiba plant with plans to raise the market share from below the 1% mark to 5%.
Mitsubishi Motors 2010-2015 800 million reais ($454 million)  Will acquire control of the local production company and doubled production capacity from 50,000 to 100,000 units to start local production of the Pajero Dakar and Lancer.
Suzuki      Will produce 3,000 units of the Jimny a year in 2012 if all goes as planned.
Mazda by 2013 30-40 billion yen (new plant in Mexico)  Plans to invest ¥30 to ¥40 billion to build a new plant in Mexico and start production in 2013 at the earliest. Will reportedly sell from Mexico to Brazilian market as well.

Major automakers' plans for Argentine market

Ford 2010-2012 $250 million  Will invest $250 million in Pacheco Plant to produce new models, not produced at any of Ford plants, and supply them to South American markets.
Honda by 2011 ¥16 billion  Will start production in the first half of 2011 at the new plant being built in Argentina with an initial quantity of 30,000 units a year.

Source: Announcements by respective automakers

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