GM asks headquarters authorization to invest another US$ 1 billion
Valor Econômico - 07/23/2008
Aiming at a market whose profitability reaches three times more than that of popular cars', General Motors announced yesterday a contract of more than R$ 3 billion (US$ 1.9 billion) with diesel engines manufacturer MWM. Besides the agreement, the maker informed it asked the headquarters for authorization to invest another US$ 1 billion in the renewal of the line of cars produced in the country and in Argentina. With that, the volume of investments of GM in Brazil foreseen, until 2012, leaps from US$ 1.5 billion to US$ 2.5 billion. The request takes place amid the deceleration of the American and European markets, which may facilitate the approval by the GM of the United States. According to Jaime Ardila, President of GM in Brazil and the Mercosur, almost everything has been approved. Currently, two plants of the company in the country may receive the third shift: São José dos Campos (SP) and Gravataí (RS). The unit of São Caetano do Sul (SP) already operates in this system. The partnership with MWM foresees the supply of 420 thousand diesel engines from 2011 to 2018 for the line of utility vehicles of the maker, which may be increased and renewed in the next three years, as well as the other categories produced by the Brazilian subsidiary. The option for strengthening the line of utility vehicles may also bring to the national market new models of vans, minivans, SUVs (Sport Utility Vehicles) and pickups. The volume of diesel engines expected for the period is 40% superior to the total supplied by MWM for the GM 10 S and Blazer models in the last ten years, nearly 300 thousand units. The forecast of the two companies is an annual production of 60 thousand utility vehicles equipped with diesel engines from 2011 on.