Fiat Chrysler Automobiles has resumed exports from Brazil to Mexico – there is a free trade agreement between both countries – after over three years due to weak Brazilian demand and a more favorable exchange rate.
Cledorvino Belini, FCA’s chief executive officer in Latin America, told Reuters Fiat’s last major export tally of Brazilian cars to Mexico was 15,000 vehicles in 2010.
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He forecast Brazil’s currency, the real, which has lost 12% this year to 2.68 to the US dollar, would hit BRL2.80 per dollar in 2015, further increasing the value of vehicles sold outside the country.
Reuters said that could further shift the dynamics of bilateral auto trade between Latin America’s two biggest economies. As recently as 2012, Brazil forced Mexico to cap its vehicle exports as a strong real and overheating Brazilian economy led to a glut of cheaper Mexican cars heading south.
Now a sharp slowdown has carmakers in Brazil, still one of the world’s five biggest vejicle markets, pushing for more open borders as they look for outlets to avoid overcapacity.
Belini reiterated his expectations for flat sales in Brazil in 2015 with little recovery from an 8% drop this year.
