DETROIT: General Motors expects five to seven percent growth through 2015 in the South America market, centered around their operations in Brazil, according to a top GM executive.
South American economies "will continue to grow at five percent and what that means is that Brazil will be a market of five million units and South America will be reaching seven million (units)," Jaime Ardila, GM president for South America told reporters on Monday.
"We're expecting growth of five to seven percent over the next five years," said Ardila, noting that GM and other automakers had benefited from the region's steadily increasing economic and political stability.
"These are large commodity exporters and they've all benefited from the demand from China," said Ardila ahead of a meeting with GM's board of directors.
GM sold more than one million vehicles in South America last year and expects the total will grow to 1.5 million units over the next five years," Ardila said.
The Detroit automaker's outreach into Brazil first began in 1925 -- one of GM's first operations outside the United States.
But among the main challenges that GM faces in Brazil in the 21st century, is the currency value of the real compared to the dollar, which, he said, "makes it very tough for manufacturing to remain competitive... It is no longer a low cost country."
The next biting issue is infrastructure to sustain rapid growth, he said.
Brazil is the fourth largest country-wide automotive market in the world, just behind Japan and ahead of Germany.
GM's market share in Brazil was 19.9 percent last year, leaving it in third behind Volkswagen and FIAT.
"We sold 650,000 vehicles in Brazil last year and our expectation is to sell 700,000 this year," Ardila said.
Brazil is home to one of GM five major technical centers, but the company has no plans to build new assembly and manufacturing plants as it has in China.
Instead, GM plans to meet the rising demand by adding shifts at its existing three manufacturing plants and complete a new engine plant, Ardila said.
The company generated an $800 million profit on $16 billion in revenues in South America in 2010, with Brazil accounting for 65 percent of the activity.
Worldwide net profit for the group was $4.7 billion.
Copyright AFP (Agence France-Presse), 2011
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