GM could cancel $1.6b investment
23 February, 2016, 12:00 am
GENERAL Motors Co (GM.N) will reconsider plans for new investment in Brazil if the economic and political situation does not improve, the company’s president Dan Ammann said in an interview published on Sunday.
Brazil was until recently one of the world’s five biggest auto markets, but it has sunk into the worst recession in 25 years and business confidence has been undermined by political uncertainty and a bid to impeach President Dilma Rousseff.
“I hope to see political and economic advances in the next six to 12 months, which would allow us to stick to our investment plan,” Mr Ammann told the Estado de S.Paulo newspaper.
Otherwise, GM would “re-evaluate,” he said.
GM announced last year that it plans to invest 6.5 billion reais ($F3b) in new products and technology in Brazil through to 2019.
But recession has hit the auto sector badly. Production of cars and trucks dropped 29.3 per cent in January from a year earlier, the lowest for the month since 2003, and sales fell 38.8 per cent, the lowest monthly total in about nine years, according to the national automakers association Anfavea.