EXCLUSIVE: BRAZIL: Strong currency costs GM export contracts
Strongly indicating its displeasure with government policy that allows a continuing strengthening of Brazil's currency against the US dollar, General Motors do Brasil has announced that it has lost export contracts for CKD vehicle assembly kits to GM's Korean unit.
GM Brazil lost a contract to ship 25,000 units CKD kits to Venezuela and Colombia in 2006 because the price was too high due to the strength of the Brazilian real. The kits will now come from Korea.
The Brazilian unit has also lost out on a deal to ship 10,000 kits to India next year.
General Motors do Brasil told just-auto it would end the year with kit exports down 30%.
As a result, it is calling for voluntary redundancies in its factories.
The real is trading at its strongest levels since mid-2002.