Renault-Nissan to invest $ 1.8 bn in Brazil

Oct 07, 2011 12:00 AM

The Renault-Nissan joint venture is investing nearly $ 1.8 bn in Brazil, in a bid to grab market share in Latin America's largest economy.
Renault-Nissan currently has a combined market share of 6.5 % in Brazil and the alliance aims to acquire a combined market share of at least 13 % of the rapidly expanding Brazilian market by 2016. Nissan will invest $ 1.5 bn to build a new plant in Resende and develop new vehicles for Brazil, while Renault will invest $ 285 mm to expand plant in Curitiba in the state of Parana.

The Renault-Nissan Alliance will bring out nearly two dozen new models specifically adapted to Brazilian consumers' needs as part of the alliance's aggressive Brazilian offensive.
Nissan will spend $ 1.5 bn to construct an all-new manufacturing facility and to develop, industrialise and launch new products in Resende, in the state of Rio de Janeiro. The all-new Nissan factory, scheduled to begin production in the first half of 2014, will have the capacity to produce up to 200,000 units annually and will create up to 2,000 jobs at the plant.

Renault already employs 6,000 people in Brazil, its second largest market after France. The expansion will add 1,000 more workers. From 1998, when it opened its first plant at Curitiba, to the end of 2010, Renault invested $ 2.25 bn in the plant and its products.
Over the next half-decade, Renault and Nissan plan to double the number of dealerships in Brazil by 2016. Nissan currently has 117 dealerships, while Renault has 186 in Brazil.

Along with India and Russia, Brazil is one of Renault's three priority markets as part of "Renault 2016 – Drive the Change". Brazil was the carmaker's third largest market for the year to end August 2011, behind France and Germany, and it was the second largest in July and August.
''In 2011, Brazil is set to become Renault's second-largest market. Brazil is one of the cornerstones of our international growth strategy, more than one-quarter of the growth in volume will come from Brazil. If we are to reach this target, then we must increase our manufacturing capacity, and we have chosen our Curitiba plant to achieve this,'' said Carlos Ghosn, president and CEO of Renault.

Renault is currently the fifth largest carmaker in Brazil behind the Fiat, Volkswagen, Chevrolet/GM and Ford.
Nissan will launch 10 new models in Brazil by 2016, including the Nissan Versa next month. By 2016, Nissan's product offering will cover 87 % of the Brazilian market, up from 66 % today, driven by an expansion of models from the company's 'V' platform.  Earlier, Renault launched the Duster 4X4, a compact SUV specifically tailored for the Brazilian market. Renault will debut 13 more models in Brazil from 2012 to 2016. By 2016, Renault's product mix will cover 90 % of the Brazilian market, up from 76 % today.

In September, Brazil's government announced new taxes on vehicles that are imported and sourced overseas.
Expanding the Curitiba plant and building another factory in Resende will minimise import duties and reduce transport and logistics costs.

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