Toyota and GM look to increase Brazilian exports

01 May 2017 IHS Markit Automotive Expert

Toyota and General Motors (GM) are planning to increase Brazilian exports in 2017, according to media reports. Toyota is reported to be supplying other South American countries with the Corolla sedan, rather than importing these vehicles from its North American Corolla production. The report says that 37 of the 40 countries in the region currently are supplied by the North American plant; it is not clear which countries will shift to Brazil-produced vehicles. The head of Toyota's Brazil operations, Rafael Chang, is quoted as saying, "To improve our export competitiveness to ship more is one of my challenges." Chang's appointment was announced in December 2016. The executive has reportedly recently visited Chile, Peru, and Colombia to drum up business. Now that GM has combined Brazil and Argentina operations under one executive, Carlos Zarlenga, the company will look to supply other South American countries with Brazilian and Argentinean production, reducing imports from South Korea, Europe, and Mexico. Specific changes to vehicle sourcing were not, however, indicated.

Significance: Production in Brazil and Argentina has been severely affected by Brazil's recession and economic issues in Argentina, with both governments increasing their efforts to supply other markets in the region. Primary production of the Corolla is at Toyota's Indaiatuba plant, with production volume expected to be in the 85,000-unit-per-year range in the near term. Toyota announced plans to add production of overflow Corolla at its Sorocaba plant in Brazil in 2015, followed by investment in an engine plant in part supporting the Corolla. Toyota's total Brazil production is forecast to reach 286,000 units in 2017 and to cross the 300,000-unit mark by 2020. GM's production in Brazil slipped to 456,000 units in 2016, from 508,000 in 2015, and is forecast to continue to see overall decline until 2020. GM operates three plants in Brazil, building the Chevrolet Celta, Onix, Prisma, Cobalt, Cruze, Montana, Spin, S-10, and TrailBlazer.


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