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GM May Suspend Expansion in Brazil
General Motors Co. will reevaluate previous plans to invest in Brazil if the country’s political and economic climates don’t improve in 6-12 months, President Dan Ammann tells Estado de S. Paulo.
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General Motors Co. will reevaluate previous plans to invest in Brazil if the country’s political and economic climates don’t improve in 6-12 months, President Dan Ammann tells Estado de S. Paulo.
He opines that Brazil should follow Argentina’s example by electing a president with more business-friendly policies. He and Barry Engle, president for GM South America, tell the newspaper Brazil needs less restrictive trade, tax, labor, regulatory and currency rules. Engle describes the country’s current business climate as “terribly uncompetitive,” Reuters reports.
GM said In August 2014 it expected to invest $2.9 billion to strengthen its Chevrolet brand business in Brazil in 2014-2018. A year later the company expanded the spending to $3.8 billion (6.5 billion reais) for 2014-2019 to add capacity, update facilities and introduce new Chevy models with advanced connectivity features.
But last year Brazil’s car market shrank 26%, and sales plummeted another 39% in January, according to trade group ANFAVEA. Ammann warns GM, which already operates five assembly plants in the country, may suspend further investment because “the environment is unstable and the outlook is uncertain” over the next few years.
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