Fiat have announced that they are to invest more than 380 million euros in their Brazilian car manufacturing operation between now and 2007.

Fiat Group CEO Sergio Marchionne, who has also recently taken over the reigns at the Auto Division since the departure of Herbert Demel, made the announcement yesterday on the occasion of an official visit by the Governor of Brazil's Minas Gerais region, Wilson Brumer, to Fiat's Turin, Italy, headquarters, and the CEO of Fiat Brazil, Cledorvino Belini.

The strategic Minas Gerais region of Brazil is home to Fiat's modern Fiasa factory, where the bulk of the investment will be made to introduce new technologies and to manufacture several new models. This 380 million euro (US$488.5 million, 1.3 billion reals) investment, Fiat expects, will help boost its already leading local market position.

Brazil is Fiat's second biggest market globally, after Italy, and while the Italian carmaker is currently struggling to turn its fortunes around in Europe, South America continues to provide good news, with regional expansion well underway.
 

Fiat Automóveis, the Brazilian-based South American operation, sits astride domestic market sales this year, ahead of arch rivals General Motors and Volkswagen. After slipping from the top spot late on last year, Fiat Automóveis has regained the leading market position in Brazil during the first quarter of this year, Marchionne said in a statement yesterday.

Fiat Automóveis, which failed to record any profit last year mainly due to financial provisions that had to be made to cover the recent closure of an Argentinean factory, sold 350,000 units in 2004, with revenues coming in at 2.2 billion euros. Brazil is the key global base for the development and manufacturing of the 'World Car Project' family, which consists the Palio, Siena, Palio Weekend and Strada pick-up. The mid-size Fiat Stilo is also highly popular on the domestic market, and it is in fact a former clear winner of the highly coveted Brazilian 'Car of the Year' award.