October 22, 2012 / 6:25 PM / 8 years ago

GM weighs selling but not building Cadillacs in Brazil

SAO PAULO (Reuters) - General Motors Co (GM.N) is thinking about selling its Cadillac brand in Brazil but has no plans to build any of the luxury vehicles there, the world’s No. 4 automotive market.

The Cadillac assembly line is seen at a General Motors Auto Plant in Hamtramck, Michigan, near Detroit, July 30, 2010. REUTERS/Larry Downing

“It’s time to start thinking about bringing Cadillac to Brazil,” GM South American chief Jaime Ardila told reporters on Monday at the media preview of the Sao Paulo auto show. “We wouldn’t consider producing Cadillacs here because of the low volume, but we may consider importing the brand.”

GM’s Chevrolet, which it considers its global mainstream brand, ranks No. 3 in sales in Brazil.

The Detroit company already is pushing to boost Cadillac sales in China, the world’s largest auto market, and hopes to compete for the luxury sales leadership in the U.S. market within a few years. GM Chief Executive Dan Akerson on Sunday called bringing Cadillac to South America within the next five years a “possibility.

While the luxury market in Brazil is still in its infancy, it is growing fast. “The rich are becoming richer in Brazil,” Ardila said.

Last year, sales of luxury vehicles in Brazil totaled almost 47,000, or 1.3 percent of a 3.5 million sales market, according to LMC Automotive. The rate has fallen off this year as new tax rules have made imported cars far more expensive, but LMC still sees luxury sales in Brazil rebounding to almost 50,000 in 2015.

German automaker BMW AG (BMWG.DE) said last week it plans to build an assembly plant in Brazil to tap into that growth. No details of the plant were disclosed, but sources said BMW plans to invest at least $395 million.

The German automaker sold only about 15,200 cars in Brazil last year but has seen average annual growth of 74 percent over the past three years.

Daimler AG’s (DAIGn.DE) Mercedes was the first luxury automaker to build cars in Brazil, starting in 1999, but it ceased car production in December 2010 and switched to commercial vehicles.

GM’s Ardila said while the company is considering selling Cadillacs, the brand portfolio will not expand to include either Europe’s Opel brand or Buick. “Our brands in Brazil would be Chevrolet and Cadillac. Just that,” he said.

Ford Motor Co (F.N) said in August that it will launch its luxury Lincoln brand in China within two years, but global sales chief Jim Farley said on Monday that the U.S. automaker has no plans to bring the brand to Brazil.

“We don’t have any announcements to make here about Lincoln expanding beyond (China), but obviously as we refresh the entire lineup, we’ll continue to look at where it makes sense,” he told reporters at the auto show. “After we flawlessly execute there (in China), we can have more conversations about the global expansion.”

Reporting By Brad Haynes, Alberto Alerigi and Ben Klayman in Sao Paulo; Editing by Steve Orlofsky

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