On Saturday, auto-giant General Motors (GM) announced that it was negotiating the “feasibility” of investing about $2.73 billion (10 billion reais) in Brazil for a span of four years — from 2020 to 2024.
This declaration comes just a month after the company said it would only consider new investments depending on its ability to return to profit.
“As market leaders, we are taking on the responsibility of facing the challenges of competitiveness that the industry is experiencing in order to make a sustainable future possible for our businesses and the proper return to shareholders,” GM Mercosul chief executive Carlos Zarlenga weighed in.
Additionally, GM also said it is in the process of completing a 13-billion reais investment between 2014 and 2019.
“We continue to work with unions, dealers, suppliers and the government in order to enable this new and additional 10 billion reais investment in the factories of São Caetano do Sul and São José dos Campos,” Zarlenga added.
Local media mouthpiece Valor Economico also reported last week of a possible investment of $2.5 billion (9 billion reais) by GM in Sao Paulo over the next three years.
This could hint at a move to get tax rebates. Recently, GM had warned its Brazil employees “sacrifices” would be necessary for the company to return to profit in the country. While it raised concerns about layoffs or shuttered assembly lines, the carmaker was quick to state that it was in talks with Sao Paulo state government regarding tax incentives.
LOOKING AT THE EARNINGS
Last month, General Motors posted its sales falling 2.7% for the fourth quarter. Shares fell swiftly after the announcement.
The quarter also marker another achievement by General Motors — it became the second automaker after Tesla (TSLA) to sell its 200,000th EV, the cap till when a federal tax credit of $7,500 was allowed.
Crossover vehicle sales grew 7% during the year to cross 1 million, primarily helped by a 34% jump in GMC Terrain.
US Sales Operations Vice President Kurt McNeil had then said, “We feel confident heading into 2019 because we have more major truck and crossover launches coming during the year and the US economy is strong.”
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