Ford Focuses on Brazil

Ford Motor (F) has revealed its plan to invest R$4 billion ($2.26 billion) in order to benefit from government tax incentives and lower interest rates in Brazil that are fueling record sales. Presently, Ford is the fourth-largest automaker in the country.

Ford has decided to spend R$2.8 billion at the Camacari plant -- a state-of-the-art plant in the northeastern state of Bahiato -- with the aim of increasing output by 20% to 300,000 vehicles a year. The plant produces the sport utility vehicle EcoSport and the Fiesta subcompact. The investment is expected to generate 1,000 jobs in the region. The remaining R$1.2 billion will be invested at Ford's factories in Sao Paulo including its Sao Bernardo plant and a testing facility in Tatui.

So far, car sales in Brazil have been significantly helped by government tax incentives that lowered car prices and lured consumers to showrooms. But the tax breaks are scheduled to expire by the end of the year. However, the investment will allow Ford to achieve state and federal tax breaks from the Brazilian Government until 2015.

Being the fourth-largest automaker in Brazil, the investment will no doubt help Ford strengthen its position to tap the huge market potential in the country, edging it past peers such as Italy's Fiat, Germany's Volkswagen and some Asian and French manufacturers. According to the Brazilian automobile dealers' association, automobile sales in the country are expected to grow by 9% in 2010.

Comments

[Dave Harris]

Smart move on Mr. Mulally's part. Brazil's emerging economy is no secret. and obviously, Ford is positioning itself to respond to that fact. Timely discernment and vision with a willingness to commit are what I see happening here, my hat is off to Ford for demonstrating these qualities..........they will succeed.

2009 Nov 25 12:12 PM

[Bull Run]

Brazil is very quickly moving up the economic ladder. It exhibited some smarts years ago to switch to a ethanol fuel, from sugar cane. Sugar cane produces 5 times more fuel than corn, which hinders America's approach. Now Brazil's autos have a totally flexible fuel engine, either ethanol or gasoline or any percentage in between, depending on consumer wants.

2009 Nov 25 08:46 PM

[Stephen12345]

Smart move. I think it will be good for Ford

2009 Nov 28 10:21 AM

[Nicholas1980]

I agree, with you all, It's a smart move, specially in a state that is growing slowly, but sustainable and by the way is a wonderful state with not only beautiful landscapes but with wonderful educated people who never where so optimistic like today. Oh by the way it's the State of Bahia and not state of Bahiato, although I'm sure that was a typo ;).

2009 Dec 07 02:02 PM