GM Invests $1.1 Billion. In Brazil

Marcelo de Vasconcellos
by Marcelo de Vasconcellos

GM is tired of playing third fiddle in the growth market of Brazil. Come on, being outdone by Italians and Germans? Gotta pay to play, so GM do Brasil announced a new investment package for operations in Brazil. That according to car site Webmotors. The money will be pouring in to the tune of R$2 billion or US$1.1b. GM corporate honchos said R$1.4 billion (US$777 million) will go to raise production capacity and modernize its plant in Gravataí, Rio Grande do Sul. The gaúcho plant now produces the Celta and derivatives. The objective, according to the suits, is to (finally!) retire the Celta line in Brazil and other emerging markets and substitute it with the Onyx family line. Will that get GM ahead?

According to my last post, the Celta family line (based on the first generation Corsa) is responsible for GM’s only 2 inclusions in the top 10. The best the only member of the Onyx line so far (the Agile) can muster is the 13th spot. I foresee a lot of cost-cutting (cheapening to be exact) at a moment when GM’s competitors in Brazil are actually improving their cars’ interiors (VeeDub’s new Gol and Fox, Fiat’s new Uno, Renault’s newish Logan, though Ford not so much).

GM predicts that with the new money, the plant will raise production from 230 thousand cars a year to 380 thousand. The rest of the money (R$600 million or US$333 million) will be applied to improvements to the São Caetano do Sul, São Paulo state factory and also to their proving grounds in Indaiatuba, São Paulo state. This investment will help GM renew all of its product line until 2012.

Not a moment too soon if you ask me. Right now, GM is struggling to hold on to its 20 percent market share and facing an onslaught of refreshed or totally new products from all competitors. How much GM will lose until the results of this investment comes true is anybody’s guess. Likewise: Where does GM keep coming up with this kind of money? And don’t let the Germans hear that GM has cash to invest abroad.

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  • Dr Strangelove Dr Strangelove on Jun 13, 2010

    Seems like the Olde GM is alive and well.

  • Stephen Kovaleski Stephen Kovaleski on Jun 13, 2010

    Add this to another reason I was against bailing out GM....Mismanagement, misrepresent and sell junk, will not admit it's junk and expect you to bail yourself out, ask the government for YOU to bail them out! Pay back our government with little interest, will not correct the problems or build more junk to replace the junk with bad P.R., send your bail out thanks and job overseas!

  • Master Baiter I'll wait for the actual driving reviews. User interface quality and range are big question marks.
  • Jeff S Years ago Kentucky issued a license plate with a horse running with the words "Unbridled Spirit." The religious right objected and did not want the plate because they believed it encouraged people to go to the race track and bet on horses. Anyone who knows anything about Kentucky knows its famous for raising horses and yes there is Churchill Downs where the Kentucky Derby is run but horses in themselves are not sinful. It got so bad that the state issued a blank sticker to put over the horse and the logo. Kentucky also issued a plate for those who were offended stating "In God We Trust." The latest KY plate has no logo and nothing. I always picked the horse because I thought horses were something to be proud of and associated with Kentucky.
  • Old Scold As a Marylander, I got those plates assigned to me when I purchased my car in 2016, 4 years after the so-called anniversary. I figured they were using up NOS, and it never occurred to me to check out the URL. I still don't care. It's a stupid issue, but I have my tag number memorized should I need it.
  • Hpycamper I drive a car with automatic braking and have nothing good to say about it. It has activated going around corners on mountain roads when the hillside is close to the road, when lawn sprinklers turned on and sprayed the car, and driving past cars on the shoulder that are making right turns. Luckily these phantom brake activations have not caused a wreck. The systems are just too dumb.
  • SCE to AUX How long until that $90k yields a profit for my grandchildren?