During his visit to Brazil last week, GM’s international president Dan Ammann reaffirmed that plans for the Brazilian subsidiary remain as announced.

Ammann took up his new position on 15 January and this was one of his first trips abroad.

"The Brazilian market is undergoing a transition, but we believe in Brazil’s and the whole region’s great potential. We will keep investing in product renewal, new engines and new technologies,” he told the O Estado de S. Paulo newspaper.

The automaker, not having a precise date for the announcement yet, has been delaying the decision on a BRL2.5bn/US$1.1bn investment. Some stages of the new spending plan are already defined but it will be announced publicly only when finalised. Spending on research, innovation and the Inovar-Auto regime’s mandatory fuel consumption reduction by 2017 is included.

A capacity increase is not planned, but developing a new subcompact to replace the Celta to compete with the recently-launched VW Up is on the agenda.

This project will be headed by GM of Brazil’s engineering and the car might also be produced in emerging countries as happened with the Onix. If launched today it would sell for less than BRL30,000/$13,000, a price bracket that accounts for nearly 35% of the Brazilian market.

GM of Brazil is yet to confirm if this model is to be powered by Opel’s new I3 engine but j-a has learned it will be manufactured at the new Joinville, state of Santa Catarina engine plant inaugurated in 2013 following a heavy, far from justifiable investment to produce only an old engine family.

At a press briefing at GM South America headquarters in São Paulo City, president Jaime Ardila admitted the Brazilian market of light and heavy vehicles will "stabilise" in 2014 and 2015. He expects sales to recover by 2016 after the inflation-taming period of monetary and fiscal constraints.

Under this local, dull scenario and despite the downturn in exports to Argentina, Ardila believes in maintaining job levels at the Brazilian subsidiary this and next year.