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Italian car
manufacturer Fiat is testing its Chinese-built Palio model
on the Brazilian highways with the aim of adapting the
Chinese model to South American road conditions with export
to other countries in the region, particularly Chile, being
targeted the company said, reports Macau-based news service
MacauHub.
Currently the Fiat factory in Brazil is responsible for
building the Palio models exported to other countries in the
region, but the recent valuation of Brazil’s currency has
increased the final cost of the vehicle. Thus the Palio
produced in China, by the Yuejin Motor Group, in Nanjing, at
a lower cost could replace the Brazilian-produced version
and be exported to neighboring countries, especially Chile
which charges a 6 percent import tax.
Brazil, Argentina, Paraguay and Uruguay, countries which are
part of the Mercosul trade region, import tax on vehicles is
35 percent, which makes the sale of vehicles from China
difficult. Since December 2002 Brazil’s currency has
increased in value by more than 40 percent against the US
dollar.
The Chairman of Fiat Brazil, Cledorvino Belini, said that
the valuation of the Brazilian real reduced competitiveness
of the vehicles produced at the Brazilian unit on the
international market. Last year, Fiat’s Brazilian unit
exported around 100,000 vehicles, a figure which is expected
to fall to about 70,000 in 2006.
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Currently the Fiat factory in Brazil is responsible
for building the Palio models exported to other
countries in the region, but the recent valuation of
Brazil’s currency has increased the final cost of
the vehicle. |
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Fiat is currently testing its Chinese-built Palio
model on the Brazilian highways with the aim of
adapting the Chinese model to South American road
conditions so as to export to other countries in the
region. |
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Belini said that prices of Brazilian-built vehicles had
increased by an average of 30 percent during the last
fifteen months. According to the Chairman, in order
to reduce their costs Fiat could start to import parts and components
for the Palio from
China, similarly to other manufacturers' set ups in Brazil.
At the beginning of February, the Brazilian subsidiary of
General Motors said it planned to start importing vehicle
parts from China, South Korea and Mexico. Last year,
Brazilian manufacturers imported US$6.6 billion in car
parts, an increase of 18.9 percent year on year.
Fiat has had a unit in Brazil since 1976, in the city of
Betim in the metropolitan region of Belo Horizonte, state
capital of Minas Gerais, in the southeast of the country.
Fiat is one of Brazil’s car market leader, selling models
such as the Palio and Fiat Uno, which is currently the
cheapest car sold in the country.
Report courtesy of
MacauHub
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