General Motors‘ plans for the Mercosur region will not be affected by the parent company’s bankruptcy in the US due to the local unit’s legal and financial independence, GM Brazil and Mercosur president Jaime Ardila said. The plan to invest US$2.5bn here from 2007 to 2012 in two stages remains unchanged.
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Of the first $1.5bn stage, 70% has already been spent to develop and begin to launch the compact car family to replace the second-generation Corsa and construction, albeit at a slower pace now, of the new engine manufacturing plant in Joinville, in Santa Catarina state.
The first new product will be a hatchback due to arrive in September from the Rosario unit, in Argentina. The so-called Viva Project also includes a light pickup truck and a compact SUV derived from the new Corsa. A medium-size S-10 pick-up and its Blazer SUV derivative are also under development here.
The additional $1bn of expenditure should get the green light in coming weeks, partially for enlarging the Gravataí plant in the Brazilian state of Rio Grande do Sul.
Between 2002 and 2005 the South American GM subsidiary obtained funding from the parent company in the US to make up for deficits but, in the last three years, profits were made and dividends sent to the US. Now it will not receive or repatriate any funds, investing instead its own cash and obtaining loans from Brazilian banks.
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By GlobalDataArdila told just-auto ties with Opel technical staff will continue: “We ourselves have plenty of design expertise but at least one of the next model launches will use Opel architecture. We are also able to exploit our links with South Korea’s GM-Daewoo.”
Though Ardila did not say which model would continue to be linked to Opel it will most likely be the successor to the Zafira minivan. There have also been suggestions that the South Korean Cruze, modified for regional preferences, would replace the Astra. In Brazil, all models are marketed under the Chevrolet brand.
Since the beginning of the year GM has lost three percentage points of market share. Some attribute that to negative news about the parent company but Ardila disputes that.
“The sudden sales drop in Brazil, due to the world economic crisis, forced us to trim production in order to reduce inventories. Therefore, we just could not cope with the quick market recovery.”
In May the company retrieved two percentage points, achieving 20% of car and light commercial sales for the month, versus 21% historically.
Yet it would be prudent to wonder if this trend will stabilise in coming months.
Fernando Calmon
