GM sees big growth opportunities south of the border, says Jaime Ardila.
It may be the most American of brands, but that doesn’t mean its success is limited to the market “north of the broder.” Chevrolet’s bid to become a global brand is already gaining traction in South America.
“South America has been Chevrolet territory,” said Jaime Ardila, president of GM South America, noting that it has been market leader for the last decade. “Many people consider it a local brand,” he added.
Chevy’s position varies from market to market, but it is gaining ground in most national markets and looking at South America to help it continue its shift away from a long-standing dependence on the U.S. market.
“This is a part of the world where GM has been very strong,” Ardila said during a visit to Detroit.
That’s especially true in the continent’s largest market. “GM do Brasil was established in 1925. It was one of GM’s first operations outside the U.S. so we have quite a tradition,” he explained
That’s good news for the maker considering Brazil is growing into one of the major emerging automotive markets. Last year, sales in the Portugese-speaking nation totaled 3.5 million, making it the world’s fourth largest national automotive market just behind Japan and ahead of Germany. Total sales in Brazil are expected to reach 5 million units annually by mid-decade, Ardila said during a meeting with reporters.
GM sold 650,000 units in Brazil and expects sales to total 700,000 this years, according to Ardila, who said GM’s market share tops 19%, putting it in third place behind Fiat and Volkswagen.
“Most of what we sell in Brazil is locally produced,” Ardila said, adding that, “We have capacity to produce a little more.”
GM do Brasil operates with three major manufacturing centers. “We’re still operating on two shifts. We’re going to start operating one of the plants on three shifts next month,” he said.
While GM do Brazil is spending $3 billion, through 2012, to refresh its product lines, it doesn’t have any plans to add more assembly plants.
GM, however, continues to hire engineers for its engineering and design center in Sao Paolo, one of GM’s five global technical centers, which specializes in products for emerging markets. It will play a key role in the launch of nine planned new models.
Ardila said other parts of South America are also growing very quickly. Argentina is getting very close to 800,000 units, Ardila said. Five years ago it was half the size of the Mexican market, but will soon match the size of the only Spanish-speaking country in North America.
Chile, which is one of the world’s unique markets because it has no significant automotive trade barriers, and supports more brands than the United States, has grown to 250,000 units.
“We think it could reach 300,000 units,” the executive said. “It’s very competitive but we’ve been able to keep our leadership,” said Ardila, adding Chile is another market where the Chevrolet brand is very strong.
GM – and Chevrolet – is also very strong in countries such as Columbia, Ecuador and Venezuela. GM has substantial market share in all three countries, Ardila said.