Fiat Automóveis reconfirmed its big plans for new model and new investment during the Latin American launch yesterday of the Grande Punto in Buenos Aires, a model which will be produced in Brazil at the rate of 4,000 units per month, with three-quarters of these destined for the domestic market, the remainder to be exported to surrounding countries.

The Fiat Grande Punto has been a huge hit in Europe over the last year and a half and Fiat in Brazil expect exactly the same to be the case in Latin American. It will cost around 40,000 reals (15,100 euros) in Brazil and come with two engine versions: 1.4- and 1.8-litre, incorporating the popular 'FlexFuel' technology. The locally-built Grande Punto, which is very different under the skin compared to its European counterpart, is introducing unheard of new levels of technology to the Latin American markets, led out by the Fiat and Microsoft developed 'Blue&Me' infotelematic package. The new B-segment model, only available in 4-door guise in the region, will help Fiat Automóveis cement its dominant market share in Brazil where it has a 26 percent share of the market, clearly ahead of VW and GM.

Fiat Automóveis CEO Cledorvino Belini said during the press conference in Buenos Aires yesterday to launch the new model that he expects Fiat's Brazilian production to continue to rise. Currently the huge Betim plant in Minas Gerais, plus a smaller second factory produce, around 700,000 vehicles a year. The addition of a third shift, new production lines, an increase in staffing levels, and the transfer of painting of several models to an Iveco plant, means production can be raised to over 850,000 units by the end of next year. All this is part of a 730 million euro investment programme in Brazil up to the end of 2009.

If the Brazilian car market keeps on growing at the current rate, "we might reach the one million car output by 2010," Belini said. Last month Brazilian car production was up 8.6 pct on June and up by over a fifth year-on-year. In July total market sales were up nearly a third year on year.
 

Fiat Automóveis expects exports to climb by 10 pct to 63,000 units this year, driven by expected high demand for the new Grande Punto in countries including Argentina, Chile and Mexico.

However, while the 2010 target of 1 million vehicles represents maximum Brazilian production capacity, there will be no requirement for a third factory, said Berlini, as there is upside to be explored in the 150,000 unit capacity Córdoba plant in Argentina, which is back in the action after being mothballed for five years due to an economic crisis.

The Argentinean government's support for a weak current is fuelling Brazilian demand for Argentine-built vehicles and with a underused, modern factory on its books Fiat is perfectly placed to benefit from this trend. Fiat Automóveis plans to invest 140 million euros in Argentina between now an the end of 2009, which includes 43 million euros spent to transfer production of the Siena (sedan) to Córdoba. It will come on stream around December. It is also spending 36 million euros to increase gearbox and component production for PSA Peugeot-Citroen, and 56 million euros to kick-off the production of a range of Tata platform based pick-ups. "The new pick up will have an initial output of 50,000 units a year, one third of the Cordoba plant's capacity," Berlini told journalists at the Grande Punto launch yesterday. However he has one eye on the on-going energy squeeze in Argentina, "[It] might become a problem later on," he added.

by Claudio Perlini