Brazil responsible for one-third of GM sales global growth
Valor Econômico - 02/13/2008
The Brazilian subsidiary of General Motors managed to develop a highly favorable environment in order to be able to ask the company headquarters the authorization for more investments. The profits of the region that includes the country reached US$ 1.3 billion last year, an amount 140% above of the profitability of the previous year. It was the best financial result in the history of the region, as a result, mainly, of the strengthening of the economies of the South-American countries, according to the assessment of GM's CEO in the Mercosur (South Cone Market) Jaime Ardila. The South America region integrates a block that also includes the Middle East and South Africa. The details of the influence of each part of the region in the profits are kept in secret, even though it is known that the Brazilian part, the greatest operation of the block, is considerable. Nevertheless, the profitability is not the only reason why the company headquarters, which announced a global net loss of US$ 38.7 billion yesterday, should be thankful to these emerging countries. Alone, the Brazilian market was responsible for one-third of the additional 300 thousand vehicles that the maker sold in the world in 2007, says Ardila. The officer remembers that the sales in Brazil represent the third greatest volume for the company, after the United States and China. With a growth of 19% compared to 2006, the GM's sales in the block that includes South America, the Middle East and Africa reached the record mark of 1.2 million vehicles in 2007. GM had 17% of the markets of this entire region last year. Almost half of it was sold in Brazil. Another record of the maker plant was the income achieved in the region: US$ 18.9 billion. The results were pushed up mainly in the last quarter. One-third of the total income - US$ 6 billion - was gotten only in the three last months of the year. However, According to GM's CEO in the Mercosur, it was not only the impulse of the local markets that guaranteed a satisfactory financial result. Ardila points the competence of the operation in the control of costs. "We have a competitive and flexible structure that allowed the sales to grow more than the costs", he pointed out. With the good financial result in 2007, the Brazilian branch once again waits for the green light from the company headquarters, in Detroit, for more investment in vehicles. Six months ago, the management of the maker announced the US$ 500 million project for the development of a new family of compact cars. Regarding a possible cycle of additional funds, Ardila says: "We are in a process of identification of the needs".