Shortly after completing the 2020 calendar year, leading the Brazilian market with its Chevrolet brand, General Motors announced that it is resuming its 2020-2024 manufacturing investment plan in Brazil, which it had frozen with the arrival of the COVID-19 pandemic. The company has just confirmed its original investment of 10 billion reais (about $1.87 billion USD at the current exchange rate) in the state of São Paulo, which was initially announced in March 2019.
As such, GM reaffirms its manufacturing and business develop commitment in Brazil, where it recently renovated most of its facilities to produce the successful Chevrolet Onix and Tracker, which allowed it to strengthen its sales leadership. The R$10 billion investment is dedicated to the development and production of next-generation vehicles at the São Caetano do Sul and São José dos Campos plants.
In addition, it will also serve to expand the supply of state-of-the-art equipment throughout Chevrolet’s vehicle portfolio in the country, including advanced OnStar telematics system services and on-board Wi-Fi hotspots. Initially, General Motors announced that the investment package would cover the 2020-2024 period, but it’s unclear if the term remains the same or will be extended due to the plan being put on pause.
São Caetano do Sul plant
This announcement undoubtedly contracts with the Ford Motor Company’s drastic decision to end its manufacturing operations in the Brazil, which was announced on Monday, January 11th. Unlike the commercial success and sustained recovery that General Motors experienced in the second half of the 2020 calendar year, FoMoCo’s business in the Brazilian market did not stop contracting during each month of the past year.
GM stayed in better position in Brazil thanks to the previous investment plan of 13 billion reais that was used to renew Chevrolet’s most strategic models in the country, including the second-generation Onix and the new Tracker. Its arrival involved a major renovation of the Gravataí and São Caetano plants, as well as the inauguration of a new line at the Joinville complex where its engines are manufactured.
São José dos Campos plant
For this reason, the majority of General Motors’ new investment package in Brazil is expected to be applied at the São José dos Campos plant, the company’s only vehicle factory that was not upgraded in the previous plan. As GM Authority exclusively reported back in February 2019, the plant will receive at least half of the new investment in order to build the next-generation Chevrolet S10 and its SUV derivative, scheduled for the 2023 model year.
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Comments
With Ford’s decision to pull out of Brazil, this should give GM more leverage in Brazil.
I do not think so.
Although Chevrolet is the best-selling brand, Ford buyers are also more likely to target other brands, such as VW, Fiat and Hyundai.