Workers install the engine in a Brazilian-made Fiat

Workers install the engine in a Brazilian-made Fiat

A new investment boom to make engines in Brazil is on the way. These ideas have been around since 2011 and took firmer shape when the government imposed the new, five-year (2013-2017) Inovar-Auto automotive regime which makes it necessary for automakers building cars here to purchase more locally-made components.

Fiat has just announced a BRL500m/US$250m expenditure for their new manufacturing plant in the north east, the country’s less developed region. There will be 550 new jobs in Goiana, Pernambuco state, as of 2015 and the plant will make 150,000 units a year.

During early planning, the Italian company had given up on the idea of engine production there because it had refurbished an engine plant in a southern state (Paraná) it had acquired in 2008 from Chrysler.

Toyota announced late in October a BRL1bn ($500m) spend to produce 200,000 engines yearly for the locally made Etios and Corolla in Porto Feliz, São Paulo state, by 2015.

Ford is currently building a 210,000 engines a year plant in Camaçari, Bahia state, also in the northeast, at a cost of BRL400m ($200m). The three-cylinder units will power the upcoming new Ka, Fiesta and EcoSport.

Another Japanese company going into engine making is Mitsubishi though local importer and manufacturer Grupo Souza Ramos is yet to reveal investment and volumes.

Other brands are expanding existing plants: Volkswagen, in São Carlos (São Paulo); PSA Peugeot Citroën, in Porto Real (Rio de Janeiro) and Renault, in São José dos Pinhais (Paraná).

General Motors will officially inaugurate its new engine plant in Joinville (Santa Catarina) on 26 February though it has been producing there since the end of last year. This project was severely delayed because it began almost three years ago at about the time of the parent company's Chapter 11 bankruptcy in the US. This was the only affected GM investment in Brazil.

In total, eight automakers are either building new engine facilities or significantly enlarging existing factories.

Hyundai Motor Brasil, a direct investment by the South Korean parent to manufacture the HB20 compact in Piracicaba (São Paulo) [there is a separate locally-owned import/assembly operation for other models], is expected  to announce an engine plant by the end of the year.

There have also been rumours Nissan will make engines at its new car factory in Resende (Rio de Janeiro) currently under construction.