Auto Manufacturers Plan on Investing US$ 4.7 Billion in Brazil by 2022

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German auto manufacturer Mercedes-Benz announced on Monday (the 9th) that it will be investing R$ 2.4 billion (US$ 750 million) in its truck and bus factories in Brazil.

The decision was made in tandem with other manufactures. Since March, eight manufacturers, including Mercedes-Benz, announced that by 2022 they will have made investments that add up to a total of R$ 15 billion (US$ 4.7 billion).

Such investments represent a significant change in spirit for an industry that was deeply affected by the recession. Between 2013 and 2016, a 42% drop took place in terms of the production of automobiles, light commercial vehicles and trucks, while 35,000 workers were laid off.

The Brazilian auto industry, which produced 3.7 million units in 2013, produced 2.2 units in 2016. The more optimistic forecasts, like the one offered by the National Association of Automotive Vehicle Manufacturers (Anfavea), outline a slight recovery in 2017, with production going up to 2.7 million units.

Mercedes Benz is planning on making its investments between 2018 and 2022 in order to renovate its factories in São Bernardo do Campo (São Paulo) and Juiz de Fora (Minas Gerais), and develop new products and technology.

The last time the company made a similar investment was back in 2010, when it applied approximately R$ 2.5 billion (US$ 800 million) in the country over the course of five years.

The president of Mercedes in Brazil and Latin America, Philipp Schiemer, has a positive outlook and is counting on agribusiness and the mining sector to boost truck sales.

“The government has adopted a more adequate economic policy. Today, inflation is low for Brazilian standards, and the interest rate is also low. The attempt to keep the country’s finances under control has been acknowledged by the financial market. If things continue in this direction, we have a chance at performing well”, said Mr. Schiemer.

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