Small BusinessFord to invest $2.3 billion for expansion in Brazil
Ford Motor Co said it will spend 4 billion reais ($2.3 billion) to expand in the growing Brazilian market, the largest investment it has made in the country.
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The five-year plan includes boosting the capacity of the Camacari factory that makes the Fiesta small car and modernising the Troller plant that builds utility vehicles, said Jennifer Flake, a spokeswoman. The Dearborn, Michigan-based company also will invest in new models for Brazil, she said.
The auto industry in Brazil, South America’s largest economy, is headed for record sales this year, the country’s automakers association said on October 7. Ford ranks fourth in Brazil, behind Fiat SpA, Volkswagen AG and General Motors Co.
“Ford understands the importance of Brazil and Argentina and they continue to invest in those markets,” Michael Robinet, an analyst at consulting firm CSM Worldwide in Northville, Michigan, said in an interview. “Every automaker is taking Brazil seriously and they should, because it’s a market with an expanding middle class.”
The Camacari factory, in Bahia state in northeastern Brazil, will be able to build 300,000 cars annually after the expansion, an increase from 250,000 now, Marcos de Oliveira, chief executive officer of Ford’s Brazilian unit, said.
“This is a very large investment for Ford,” Mark Fields, Ford’s president for the Americas, told reporters at the announcement in Brazil. “We’re investing because we want to continue to grow and to improve our competitiveness.”
Ford has sold 298,134 vehicles in Brazil this year, giving it 9.9 per cent of the market, CSM said. That share is down from 10.2 per cent in 2007 and is less than half of GM’s 20.3 per cent, the firm said.
Third-quarter pretax profit in South America declined 49 per cent to $247 million, as revenue dropped 22 per cent to $2.1 billion, Ford said on November 2. The automaker blamed “unfavorable” currency-exchange rates in Brazil and Argentina.
Ford fell 9 cents to $8.64 at 4:15 pm in New York Stock Exchange composite trading. The shares have more than tripled this year.