• The Brazilian government has encouraged car manufacturing by removing taxes on new cars. In a country where the cost of running a car is 37% higher than elsewhere in South America this measure has been successful in encouraging sales.
• Brazil’s transportation infrastructure across its 26 states is one of the worst in the world. The Brazilian government intends to spend approximately €13.6 billion between 2010 and 2013 on improving the road infrastructure plus roughly the same amount on public transportation (rails, metro and bus). These factors will encourage continued growth in the manufacture of passenger cars and trucks.
• Such is the attraction of south-east Brazil for car manufacturing that General Motors is investing €1.7 billion in its Brazilian plants and Ford Motors is investing €2.75 billion between 2010 and 2015 creating 1,000 new jobs in the industry. Fiat has already invested €2.1 billion in its existing huge factory in Betim near Belo Horizonte. When finished it will be Fiat’s largest global assembly plant.
Fig. 19 Location of car manufacturing plants in south-east Brazil