Excess capacity through 2016 will be a royal pain in the butt for Ford, hurting their margins on the all important small car segment.
Despite Brazil’s booming car market, capacity is expected to outpace demand by 20 percent each year until 2016. Mark Fields, Ford’s head of the Americas, told Reuters
“Excess capacity is going to put more pressure on pricing and margins, particularly in the B segment, or small car segment, which is the largest segment in Brazil”
Ford is one of Brazil’s four largest auto makers, with multiple assembly plants in the country. But market share for the “Big Four” has been eroding as new entrants capture the eye of consumers while also building new local plants to dodge hefty import taxes.