Chinese automaker Chery has built its first Celer model at a new plant in Jacarei in Sao Paulo, Brazil. The plant’s inauguration is set for August 2014. The first model off the line was part of the production testing process. Production of saleable models is due to being in November 2014. According to a report from Esmerk Latin America News, Chery is concerned about the current sales, export and production declines in Brazil, but also confident in the long-term. Chery’s target is 3% share of the car market and light-vehicle sales between 2017 and 2018. About that time, factory output will reach 150,000 units per annum. Initial capacity will be 50,000 units in 2015. Chery has invested USD400 million in the factory.
Separately, as production has been declining throughout 2013, the same publication reports that Mercedes-Benz will lay off 1,200 workers at Sao Bernardo facility in Brazil for five months beginning 1 July 2014. Mercedes had been expected to lay off 700 workers. Also, Ford has announced production at Sao Bernardo will be idled between 7 and 18 June.
Significance: Brazil is continuing to see a difficult 2014, with decreased sales and exports forcing a decrease in production. However, according to the IHS Automotive sales and production forecast data, the strengths of the Brazilian economy (formal job creation and the ability to tap into credit, as well as the magnitude of credit available), along with a low motorization rate, has IHS forecasting sales to near the 4.3-million unit mark towards the end of the decade. Brazil also has a low motorisation rate, allowing for growth.
