MercoPress. South Atlantic News Agency

Brazil Car Manufacturing Expands: Peugeot Citroen Plant Opens

The French car manufacturer, PSA Peugeot Citroen, is making a major effort to increase its share of sales in the Mercosur countries of South America after opening a 600-million dollar (£400-million) car assembly plant in the hinterland of Rio de Janeiro State, at Porto Real, creating 3,500 jobs. Rio State has a 32 per cent stake in the plant. PSA benefits from generous tax breaks and subsidies. The chairman, Jean-Martin Folz, is quoted in British newspapers as saying: "Our strategy is growth. We want to increase our market share in Mercosur (Argentina, Brazil, Paraguay and Uruguay) from five per cent now to eight per cent in 2003". The PSA group claim to be a leading manufacturer already in Argentina with a 16 per cent share, and in Uruguay with 18 per cent. In Brazil, PSA sales have doubled in over the past three years to just under four per cent. Folz wants to double that share again by 2003, by which time the Porto Real plant, making Peugeot 206 and Xsara P models, will have a planned output of 100,000 vehicles a year. It is buying some engines from its French rival, Renault, which has an engine plant in Curitiba. More than 1,000 guests attended the opening of the factory, headed by President Fernando Cardoso, and the Governor of Rio State, Anthony Garotinho, both of whom made speeches on Brazil's progress. Peugeot Executives, their leading suppliers and journalists were flown by Airbus to Brazil, along with a troupe of performers from the cast of France Opera. Peugeot-Citroen was the only European manufacturer that expanded its market share in Europe last year.

Ford and General Motors Factories

An article in one British newspaper says that every car-maker of note is building a plant in Brazil, in "an almost unseemly dash to exploit an economic recovery that looks, unusually for this part of the world, as if it might survive more than a year". During the 1990s, the article says, the Brazilian Government promoted the development of cheaper cars with lower taxes. Last year the market grew by 17.5 per cent and vehicle sales are expected to increase almost 9 per cent this year. Ford is erecting a 1.7 billion dollar (1.3 billion pound) facility in Bahia State to produce 250,