Gm Plans New Low-Price Car In Brazil

General Motors Corp plans to build a new low-cost car in Brazil that would sell for about $9,000 and utilise production techniques that maximize efficiency, industry analysts and two published reports said Monday.

GMs new car, code-named Blue Macaw, is expected to undercut the $11,000 price of Ford Motor Cos new Ka small car in Brazil, and Fiat SpAs Uno, currently the countrys cheapest car at $10,000.

The Wall Street Journal and the trade weekly Automotive News quoted GM officials in Brazil as saying the new car will be built in a new, $600 million assembly plant that the company is building in southern part of the country.

 

With a such a low price including sales taxes GM hopes the car will open up a new market of consumers who previously could not afford to buy cars and trucks, the reports said.

In addition to the GM assembly line, the plant will house about 20 outside suppliers that will build major parts sub-assemblies for the vehicle. Many of the concepts used were first developed by J. Ignacio Lopez de Arriortua, the former GM purchasing chief who was accused of industrial espionage when he abruptly quit and joined Volkswagen AG in 1993.

Plans for Lopez so-called Plant X were among the alleged documents that GM accused him of stealing and bringing to VW.

The German automaker has built a plant using similar techniques in Resende, Brazil.

GM officials in Detroit declined to comment on the reports and referred calls to the automakers public relations office in Brazil, which did not return telephone calls on Monday.

GM is hosting hundreds of supplier executives in Rio de Janeiro for its annual Supplier of the Year awards ceremonies.

Michael Robinet, an automotive consultant with CSM Forecasting in Farmington Hills, Mich., said the Blue Macaw vehicle is based on GMs next-generation Opel Corsa platform. He described as a stripped-down Corsa.

This will meet the Ka on its own turf, said Robinet, who researches new product programs for automotive suppliers.

Fords Ka is based on the European Fiesta platform, which the company also is now beginning to produce in Brazil.

Automotive News quoted Marcos Munhoz, GMs director of materials management, as saying that outside suppliers will build all of the cars major components except the engine and transmission and the exterior body panels. GM workers will fabricate the body paint it, and perform final assembly.

The Journal said global volumes of such a small car could reach 1 million units as GM expands its operations into developing countries.

When you think about emerging markets like China, India and Central Europe, at this price point, you could get into that level of volume, Mark Hogan, GMs director of small car development, told the newspaper.