FCA Brazil trumps GM, Ford with US$4bn investment plan
FCA’s announcement this month to invest US$4 billion in Brazil is more than 50% the US$2.5 billion in investment plans announced by General Motors (GM) this year.
As for Ford, the US automaker actually announced the closing of its factory in São Bernardo do Campo City (São Paulo state) in February but it was bailed out by local car manufacturer and distributor CAOA which has taken over operations.
CAOA intends to invest in the factory only if federal government reforms are accomplished this year. This looks likely to occur in the coming months.
As for FCA, US$2.1bn will be invested at its Betim factory (Minas Gerais state) and US$1.9bn at its Goiana factory (Pernambuco state). The investments will enable FCA to achieve a production capacity of 1.3 million engines per year, starting in 2020, making it the largest producer of engines and transmissions in Latin America.
FCA's Jeep Compass was the best-selling SUV in Brazil in 2018, followed by the Jeep Renegade. The best-selling car in the country remains GM's compact hatch, Chevrolet Onix.
2019 Jeep Compass (source: Jeep)
In related news, following the 8% jump in FCA’s stock price to US$13.89 from US$12.86 on Monday (May 27), sparked by rumors of a merger with Renault, its share price has been gradually dropping, closing Thursday at US$13.38.
If the merger does occur, it would lead to the creation of the 3rd largest global automotive group, with annual sales of some 8.7 million vehicles.