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Fiat in talks to build second factory in Brazil

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Fiat in talks to build second factory in Brazil

December 10, 2010 06:01 CET

SAO PAULO (Reuters) -- Fiat S.p.A. is in talks with the government of Brazil's state of Pernambuco to open a second car factory in Brazil, a source close to the state government told Reuters.

The company is seeking to build the factory in the industrial complex of the port of Suape, the source said, speaking on condition of anonymity.

The negotiations come as Fiat's Brazilian factory is operating nearly at full capacity to meet booming auto demand and as other automakers such as Toyota and Hyundai are also planning investments in factories in Brazil.

A formal announcement about the deal is expected to take place on Dec. 14 when President Inacio Lula da Silva visits the state.

When contacted by Reuters, the company said: "Fiat and the government of Pernambuco are maintaining negotiations about possible investments in the state," without elaborating.

Fiat's factory in the state of Minas Gerais has output capacity of around 800,000 cars per year. Company executives have recently said they could boost sales in Brazil by using idle capacity at the firm's Cordoba, Argentina plant.

Fiat recently announced plans to invest 10 billion reais ($5.8 billion) by 2015 in Brazil, a plan that includes cars, auto parts, and agricultural equipment. About 70 percent of the total will be invested in cars, with the company expecting in 2011 to unveil 20 new models or upgraded versions of current ones.

In March, Fiat opened a 1-billion-real ($585 million) facility in Brazil to produce agricultural equipment.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20101210/ANE/312099955/1317#ixzz17ipAmzt1

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By Mark Kleis

Fiat can already tout the title of being the sales leader in the Brazilian auto market nine years straight, but now the automaker will construct an all-new plant at the cost of $1.74 billion as part of a larger $5.9 billion effort to take place between 2011 and 2014 in Brazil.

This new plant will be constructed in the vital Port and Industrial District located in Suape, in the state of Pernambuco. The automaker says that the construction of this plant will play a crucial role in part of its larger comprehensive program of industrialization, as well as economic and social development in the region.

Fiat says the plant will serve many roles in addition to constructing new vehicles, including research and development, style and design, the development of new platforms and products, as well training for new employees.

Fiat’s plant will offer production capability of as many as 200,000 vehicles annually – some of which will be newly developed specifically for the Brazilian market (in addition to other Latin American markets). The plant will be located within a larger 4.4 million square meter industrial zone that Fiat says will employ as many as 3,500 workers.



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