Dow Jones reports that Ford may boost capacity at its newest Brazilian plant sooner than expected after selling 13% more cars in South America between January and November this year.
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The jump in sales, which follows seven years of financial losses by Ford in Latin America, comes after the US company started making the new Fiesta and [Fiesta-based] Ecosport models at its Bahia plant in north-eastern Brazil, the report said.
But, Dow Jones, noted, the local car industry as a whole is in a deep recession with sales expected to contract about 7% to less than 1.4 million this year from last, as a weak economy deepens a multi-year slump.
Ford, the fourth biggest car maker in Brazil after General Motors, Fiat and Volkswagen, is fighting the trend and expects to end 2003 with a 11.5% share of the 1.4 billion local sales market, up from 9.9% last year, the report said.
Executives told Dow Jones that the improvement could lead Ford to add a third shift in Bahia, ramping the plant up to full capacity in 2004 instead of 2005 as originally planned – the plant currently turns out 730 vehicles per day and can produce 850, or about 250,000 per year.
The report said Ford has also been helped by growing exports, which have been rising faster than domestic sales and now account for more than a third of all sales; domestic sales rose 13% to 145,000 vehicles between November and January while exports jumped about 40%.
Dow Jones said that car makers in Brazil, who invested more than $US20 billion to increase capacity over the past decade only to watch sales decline, hope trade agreements being negotiated with South Africa and Venezuela will help lift exports to those countries as soon as next year.
