BRAZIL: Renault-Nissan's Ghosn lured by higher profitability in Russia
This year has been very good for Renault in Brazil, the French brand’s second largest market. Sales grew 25% to almost 250,000 units, 30 new dealers were added (now 235), including updates, six models were launched and there were new engines, too.
Nonetheless, the automaker’s plant will be shut for two months until next February to complete refurbishing work that will raise capacity from 280,000 to 380,000 units a yearly plus 100,000 additional engines. Some 40% of the planned 500,000 capacity will be for export.
Renault-Nissan alliance CEO Carlos Ghosn visited to praised the reaction of the market to the government's IPI tax slash.
“Earlier this year we expected a downturn of up to 4% in industry sales and the final result will be a healthy 5% growth.”
Brazil born and raised Ghosn knows the automaker’s share price and profit is discussed almost like a national sport.
“The profit level here is similar to Europe and Japan in normal times. Of course it is an interesting market, otherwise we would not invest. But among the emerging markets, Russia gives us higher profitability.”
But he complained about production costs. “Brazil exports iron ore to Korea and from there comes steel comes cheaper that that produced locally”, he said.
The executive pointed to faster product updating, following more closely changes to the Romanian-made Logan and Sandero.
“But the Duster will keep being updated here prior to Europe because the SUV was first launched in Brazil where it really is a hit,” he said.