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Monday, December 16, 2013

Vehicle manufacturers to invest almost R$ 76 billion in Brazil

by Marcos Rozen

A whopping R$ 76 billion should be invested by the vehicle manufacturers in Brazil within the next years. The value does not include investments from suppliers or other automotive chain manufacturers of products such as agricultural equipment or implements.
The figure is based on Anfavea's official investment value of R$ 73.1 billion, announced early September, for the period ranging between 2013 and 2017.
Since then, R$ 2.5 billion have been added to the total. Volkswagen announced it would invest R$ 500 million for the production of the new Golf in São José dos Pinhais, PR.
Mercedes-Benz announced another R$ 500 million will be invested to enable light vehicles production again in the country, in a Greenfield facility in Iracemápolis, SP. Mercedes-Benz truck and bus operations announced an additional R$ 1 billion investment, and Jaguar Land Rover announced an investment of R$ 750 million to build its first manufacturing facility
outside Europe and Asia, located in Itatiaia, RJ.
The total, therefore, has reached R$ 75.85 billion.
It is important to note that Jaguar Land Rover's investment should be applied up to 2020, and not 2017, unlike the other manufacturers. This is because the company considers the total investment made will be up to the full operation of the 2nd phase of the unit, in 2020.
However, the inauguration of the line is scheduled to occur during the first months of 2016, and one can classify it as an investment in the premium segment, such as those investments announced by Mercedes-Benz, Audi, and BMW, in addition to the Volkswagen investment for the Golf, which, coincidently, is all in the R$ 500 million range.
As a result of the subtraction of R$ 250 million, which, at least, hypothetically would be used by Jaguar Land Rover for the period ranging between 2017 and 2020, the planned total investments made by vehicle manufacturers in Brazil up to 2017 is still a significant R$ 75.6 billion.
The total investment value includes recent announcements made by Audi, in São José dos Pinhais, PR, and Grupo Caoa's investment of R$ 600 million in Anápolis, GO. Honda, R$ 1billion and the new passenger vehicle facility in Itirapina, SP. and, the previously known investments from DAF, Jac Motors, Nissan, BMW, Chery, and Mitsubishi.
Surprisingly, the current value could increase as soon as early next year, when General Motors is expected to make an announcement of an investment of approximately R$ 2.5 billion in its facility located in São José dos Campos, SP. This would result in total investments valued at R$ 75 billion.

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