GM And Peugeot To Decide On Brazil Plant This Month: Report

General Motors and its newly-found partner PSA Peugeot Citroen will reportedly make a decision on whether to build a 1-billion Euro ($1.28 billion) manufacturing facility in Brazil by the end of May. According to Brazil’s Veja news magazine, which didn’t disclose the source of its information, the plant may be built in the State of Rio de Janeiro or Minas Gerais.

Currently, GM operates three factories in Brazil, including those in:

• Gravatai, Rio Grande do Sul; opened in 2000 and builds the Chevrolet Celta
• São Caetano do Sul, São Paulo; opened in 1930 and builds the Cobalt, Corsa, and Classic
• São José dos Campos, São Paulo; opened in 1958 and builds the Blazer, Meriva, Montana, Corsa C, S10, Zafira

The GM Authority Take

While the capacity of the above plants is not provided by GM Brazil, The General could be creating an overcapacity problem for itself by building a fourth facility — putting itself in a similar dilemma as GM Europe (read: Opel) is today. That is unless one of the existing plants will be set for closure, or if PSA plans on significantly contributing to the output of the new facility. Additionally, Brazil — and South America in general — is seen as a growth market for the auto industry — so perhaps an additional plant will help meet demand locally.