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The Renault-Nissan alliance aims to become one of the top four car groups by market share in Brazil after announcing investment plans totalling R$3.1bn ($1.7bn) for Latin America’s largest economy, chief executive Carlos Ghosn said.
The plans, which include an investment of R$2.6bn in a new Nissan plant near Rio de Janeiro, come amid forecasts that the country will overtake Japan as the world’s third-largest market for cars, after China and the US, by 2015.
News and comment from emerging economies, headed by Brazil, Russia, India and China
Brazilian car production fell by 19.7 per cent in September compared with August and sales were down 4.9 per cent, although most analysts remain bullish on the long-term outlook of the market.
Mr Ghosn on Thursday announced the alliance would invest R$2.6bn in its first Nissan plant in Brazil. The factory near Rio de Janeiro will have capacity of 200,000 vehicles when it starts operations in early 2014.
Earlier in the week, he announced an expansion of the company’s existing Renault factory in Curitiba in southern Brazil. Together, the plans will give the group total capacity of 580,000 units in Brazil.
Mr Ghosn said he aimed to raise Renault’s share to 8 per cent by 2016 and Nissan’s to 5 per cent through the introduction of 23 new models.
At present, both groups’ offerings are not under-represented in Brazil – Renault shortly plans to introduce its best-selling Duster sport utility vehicle plus 13 other models by 2016.
Nissan plans to do the same with 10 new models and a plan to capture something similar to its average global market share of 6 per cent.
“The strategy on market share is based on products – you have the right products in terms of design, functionalities, price, you are going to gain, if you don’t have you are going to lose,” he said.
Nissan-Renault along with other carmakers will also face challenges from cheaper Chinese made cars, with Chery, JAC and other Chinese producers rapidly gaining market share in Brazil.
“Major manufacturing costs, expensive financing and high taxation combine with low automation levels in production to blunt Brazil’s competitive edge,” consultancy Roland Berger said in a report last month.
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