General Motors stood by Brazil as the country’s economy suffered through one of its deepest recessions in decades. Moving forward, GM hopes to boost profitability and efficiencies with a single vehicle family for Brazil and China.
The goal is to boost synergies between the two markets. In total, GM expects to build 2 million vehicles for China and Brazil to lower production costs.
“That is an unprecedented level of scale,” GM President Dan Ammann said in an interview with Reuters.
GM is already the best-selling automaker in Brazil, largely thanks to the popular Chevrolet Onix and Prisma models. The automaker worked tediously to lower its break-even point in the market, a figure down 40 percent with major restructuring in the country. GM encouraged unions to sign multi-year wage contracts tied to inflation, reworked its supply chain and even ditched ritzy corporate offices.
It also finally shows GM’s true corporate strategy moving forward: maximizing profits over competing worldwide. GM’s retreat from markets is widely documented in India, Indonesia, Russia, Europe and Australia.
The Brazilian economy started to rebound last year and brought vehicle sales up 9 percent with it. Now, GM sees South America as a major profit contributor.