Last Wednesday General Motors Corp. Chairman and Chief Executive Rick Wagoner have announced that the automaker will invest a total of $500 million for both its operations in Brazil and Argentina.
Chairman Wagoner also said that the investment will include around $400 million which will be utilize for the development and production of new generation small cars which are to be sold in Latin America and in other markets in the world. There would also be an additional $100 million that will be used to upgrade technology and development operations in the region.
Chairman Wagoner said that GM was fascinated by the "steady economic growth in Brazil and economic stability in Mercosur."
By the way, Mercosur is the South American trade group formed by countries like Uruguay, Argentina, Brazil, and Paraguay.
Chairman Wagoner has made the announcement during a meeting of executives in Sao Paulo which is Brazil’s largest city as well as manufacturing center. The world’s largest automaker and producer of top of the line Saab components like the Saab brake hose, General Motors has maintained a large manufacturing facility in Sao Caetano do Sul which is located in the suburbs of Sao Paulo.
Chairman Wagoner also stated that the new lines of small vehicles are to be manufactured in Brazil and in Argentina. He further stated that the investment "will include upgrades in GM's plants in Rosario, Argentina and Sao Caetano do Sul, Brazil."---this means that there would be new equipment and infrastructure to be added at GM’s development center in Sao Caetano do Sul.
Chairman Wagoner said, "With the improved economic environment in Argentina and Brazil, we are proceeding with our next phase of investments to support our continued growth in Latin America and around the world."
He further added, "We have been growing our engineering resources in key emerging markets like Brazil, China and India. This will allow us to take full advantage of the expertise we have in Brazil and support our planned local and global sales growth."
GM’s decision to invest in its South American facilities was attributed to the imminent growth in emerging markets which the automaker hope will be able to offset the continuously declining sales in the US market where its Asian rivals are presently dominating. General Motors has been putting in billions of dollars into this new effort which it hopes will provide it with a much better position in markets such as those in China, India, and Russia.
GM is also exploring other potential ventures like a tie-up with Malaysia’s Proton Holdings Bhd which could provide General Motors with an opportunity to enter the Malaysia’s market.
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