• Categories
  • Archives

Brazil to Become in a Decade World’s 3rd Largest Car Maker, Ahead of Japan

Brazil's Volkswagen Car production capacity in Brazil should jump from the current 3.6 million units per year to 6.2 million by 2025 supported by massive investments from the industry estimated in US$ 19 billion by 2017, according to estimates from the Vanzolini Foundation in São Paulo.

If this is confirmed the South American trade block Mercosur with Brazil would become the third-largest manufacturer of the world behind China and the United States, and ahead of Japan.

New manufacturers, mainly from South Korea and China, will play key roles in this development. Only in new factories, investments will amount to US$ 5.22 billion, according to Brazilian magazine Isto É . The remainder, about US$ 14 billion will be mainly spent in the expansion of existing plants of Volkswagen, Ford, General Motors and Fiat.

The latest to join the rush is China’s JAC Motors, which together with Brazilian importer of JAC vehicles SHC, plan to invest US$ 600 million to build a factory in Brazil, SHC President Sergio Habib said on Monday.

The factory, with an annual capacity of 100,000 cars, will begin operations by 2014, Habib said. SHC will account for more than half of the investment, Habib told reporters in São Paulo.

China’s Chery Automobile last month laid the cornerstone for its first manufacturing plant outside of its Asian home country, and South Korea’s Hyundai Motor Co. began construction of its 600 million dollars assembly plant in February. Japan’s Nissan Motor Co. and Honda Motor Co. also have announced new investments in Brazil, currently the world’s fourth-biggest market by sales last year.

However the executives of German and US automakers, established decades ago in the country view the newcomers with suspicion.

The president of General Motors of South America, Jaimes Ardila, stated: “Let’s see if they will be competitive with the cost of producing in Brazil”. Undoubtedly, the cost to produce in Brazil is higher if compared to China. However, companies avoid 35% taxes on imports and logistics expenses with local production.

According to Luis Curi, CEO of Chery Brazil, “It takes about four months between the order and final placing of the vehicle in Brazil”.

Because of multilateral agreements, cars produced in Brazil can be exported without taxes to Argentina, Colombia, Chile, Venezuela, Paraguay and Uruguay, all members or associates of Mercosur.

Brazil also has an agreement with Mexico, signed in 2002, that waives import taxes on vehicles. In relation to other Latin American nations, Brazil’s main competitive advantage is, unquestionably, its huge domestic market, comprising 150 million consumers.

Answering skeptical people who may affirm the Brazilian market will be saturated with such an expansion in such a short time, Cledorvino Belini, Fiat’s president in Brazil was defiant and confident.

“In Brazil there is one car for every seven people, while in the U.S. this ratio is one to two.” Nobody imagines that Brazil will match this US proportion in the near future but it does illustrate Brazil’s prospects for the medium and long-term.

Wind Farms

Elecnor, a group from Spain, is building more wind power plants in Brazil’s southern state of Rio Grande do Sul totaling an estimated 300 MW. The undertaking was boosted by funding from Brazil economic and social development bank, BNDES.
 
The funds for subsidiary Enerfin amount to 445 million reais (about US$ 284 million) in 16 years and covers the last three awards won by the group in Brazil, totaling 150 megawatts of wind power.

Specifically, the wind farms of Leilões (96 MW in 2009 and 46 MW in 2010) and the wind farm Palmares, with an additional award 8 MW.

Of the 150 MW, located in the state of Rio Grande do Sul, 30 MW are already in operation, while commissioning of the remainder is expected between this year and next.

The addition of these new and previously developed MW increases the total wind power in Brazil from Elecnor to 300 MW

Mercopress

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazilian Author Shares the Scoop on Building

Former president of the Arab Brazilian Chamber of Commerce and of the entity’s Administration ...

Collor de Mello four years after the fall Part II

Part II After two years as a President Fernando Collor de Mello was still ...

We Owe No Money, But We Are Brothers, Says Brazil to Paraguay Demands

The Brazilian government could anticipate payments to Paraguay for the energy from the shared ...

Por aí

Sounds of Brazil The traditional and the experimental in Brazilian music are having a ...

Brazil Has World’s Largest Public Tranplant System

In the last two years, Brazil presented record growth in the number of organ ...

Brazil President Goes to Washington for Summit on Global Economic Meltdown

American President, George W. Bush, invited his Brazilian counterpart, Luiz Inácio Lula da Silva, ...

Rally Has Ended. Stocks Are Down in Brazil

Latin American shares moved lower amid significant losses in both Brazil and Mexico. Investors ...

Brazil’s Foreign Debt Drops US$ 13 Bi to a Still Hefty US$ 201 Bi

Brazil’s net foreign trade, service, and financial accounts in February resulted in a US$ ...

Brazil’s Didn’t Act Out of Self-Interest in Hong Kong, Says Lula

Brazilian President Luiz Inácio Lula da Silva said Monday, December 19, that his country ...

Catch Brazil’s WSF Forum on Satellite

Starting today, the 2005 World Social Forum will transmit (clean) international audio and video ...