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FULL ARTICLE | EDITORIAL 
Fiat, in Brazil, produced an ace from its sleeve
Peter Schmidt | Editor

Published: Fri, 17th June 2016 12:52:18 GMT
 

FCA Jeep Renegade Brazil facility production 2015


Open quote signEven the most experienced driver, totally familiar with their present car, needs to adjust very quickly to the workings of a newly acquired model.

Evidently, after first taking delivery of the replacement model the owner will at first be struggling to adjust and deal with all the new high-tech features.

So, to drive the new vehicle with complete comfort and safety it is advisable to learn and fully comprehend most, if not all, the new features.

With all that taken on board, the driver will be comfortably settled in the new car rather quickly.

Failing that, the maiden journey from dealer premises to home could conceivably turn into a hazardous journey.

Brazilís car market, after decades of next to no change, has also undergone a profound sea change.

Almost overnight, it seems, the changes ended a cosy carmaking oligopoly in Latin Americaís biggest market.

Volkswagen and Fiat, effectively calling the shots there for decades, while making the most of their Brazilian cash cow, appear to have been caught on the hop.

Like a rabbit mesmerised by the headlights of a speeding car, both Volkswagen and Fiat appear to have been taken by surprise.

Koreaís Hyundai in particular, has brought about the change.

So as not to get caught out by Brazilís high vehicle import tariffs, Hyundai went straight into the deep end.

It built a proper car manufacturing plant in what long-looked like Fiatís and Volkswagenís backyard.

Vital homework done, its first Brazilian-made car turned into an instant hit with locals.

For Volkswagen and Fiat, Hyundaiís arrival in force was reminiscent of dropping the cat among the pigeons.

The impact was the same; a dose of painful bloodletting.

Hyundai, in what seems little more than the blink of eye, is mopping up valuable market share chiefly at their expense.

Judged by the latest state of play, the question is not if, but when Hyundai will dethrone Brazilís previously long-ruling car sales Kings.

Thatís not to say that this unfolding path of events is inevitable.

Of course not.

Fiat, quick to act, already gave notice that it is not willing to relinquish its commanding and long-profitable standing in Brazilís car market without a fight.

To its credit, wobbling Fiat already produced an ace from its sleeve.

Fighting fire with fire, its small and yet most capable Jeep Renegade is built in Brazil at what Fiat describes as its most technologically-advanced and sustainable automotive plant in the world.

Construction at the all-new Ä1.3bn automotive plant only began in September 2012 and when completed it will form the centre of a highly-integrated automotive hub with an annual capacity of 250,000 cars.

Latest car sales data says that the global SUV-Crossover bug has now also affected Brazilís otherwise reluctant new car buyers.

Given that Fiatís Brazil-made Renegade, thanks to its new cutting-edge manufacturing facility, will likely be made cost-effectively, it is also bound to be heading en-masse to other Mercosur markets.

Once again, it seems, predictions of Fiatís, or for that matter Chryslerís early death are rather premature.

Likelihood now is that Fiatís recent demise in Brazil will likely give way to a vigorous bounce back.

Fiat-Chrysler-Chief Sergio Marchionne said as much. Speaking only recently about Fiatís brand new Pernabuco car plant Marchionne said in Brazil ďwe expect to sell more than 1.3 million cars by 2018Ē.

In Brazil, Volkswagen is facing the same rough seas as Fiat and that inevitably raises the question of Volkswagenís response to Fiatís Brazilian rescue plan
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