A lengthy attempt by Ford Brazil to build a new plant has been resolved, in part at least.
After 16 years of talks, the automaker reached an agreement with Rio Grande do Sul state, where it planned to build its second car manufacturing plant in the city of Guaíba in Greater Porto Alegre, capital of Brazi’s southernmost state bordering on Uruguay.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
But, by that time, GM had just opened its new plant in neighbouring Gravataí. Ford’s factory was still only at the earthmoving stage when a new state governor was elected and misunderstandings arose.
The automaker axed its plans and was invited by Bahia to invest in that state in the northeast where it subsequently built the Camaçari plant, 45km (25 miles) from the state capital Salvador. It opened in 2003 to make the first EcoSport, which made its global debut in Brazil.
Meanwhile, the dispute with Rio Grande do Sul went to court and is still in the legal process. Current state governor Ivo Sartori has accepted Ford’s proposal to settle the dispute by making an installment payment of BRL260m/US$81m.
Despite resuming a third shift at Camaçari, where it makes the EcoSport and Ka to meet growing export demand, last year was far from good to Ford Brazil.
The blue oval lost its long-time fourth place ranking by sales in 2016. It used to be one of the ‘Big Four’, a reference to Brazil’s long-established automakers.
Up to 2007, GM (Chevrolet), Fiat, Ford and Volkswagen together accounted for over 80% market share. In 10 years they have lost 25 percentage points of that (according to MA8 Consultancy data released by the Automotive Business website).
Each lost percentage point means a drop in average turnover of BRL1.1bn/$340m. Therefore, in one decade, the Big Four failed to sell vehicles worth BRL29bn/$9bn.
Last year Hyundai and Toyota ranked fourth and fifth, respectively, in domestic sales.
Ford has plunged to sixth. The EcoSport has come under pressure from newer rivals such as the Honda HR-V and Jeep Renegade, also both locally produced. These two have taken leadership from the Ford model.
The little Ka has managed to perform well, yet its growth is jeopardised by the latest Fiesta. The Argentine-made Focus did well too but the saloon version (called Fastback here) was a flop. The Fusion imported from Mexico sustained leadership in its restricted, top-level segment while the Ranger pick-up truck, also imported from Argentina, was hurt by the arrival of the Brazil-built Fiat Toro.
