With the belief that the crisis in the automotive sector will not last forever and with an eye on the international market, General Motors announced a huge investment to start manufacturing engines in Argentina. The announcement, which took place at the Government House, was in made by the president of General Motors Company (GM), Dan Ammann. On the other side of the table listened the Chief of Cabinet, Jorge Capitanich and the Minister of Industry, Debora Giorgi.
The company will invest USD 270 million to build a new engine plant in their automotive complex in General Alvear, near Rosario. According to a press release from the company, "this number (USD 270 million) is added to the $ 450 million already being invested to build a new global model for late next year" and an additional $ 20 million to modernize the equipment of the plant, which manufactures the Agile and Classic automotive models. Thus, the projected investment for the period 2014-2016 amounts to $ 740 million.
"The expansion of our investment in Argentina is important to the success of our business here," said Ammann, that was accompanied in the announcement by Chuck Stevens, executive vice president and CFO of GM; Jaime Ardila, president of GM South America; Carlos Zarlenga, Executive Director of Finance of South America; Isela Costantini, President of GM Argentina, and Nicholas Abbate, director of Public Affairs and Communications of the local subsidiary.
"The Argentine market is an important market for us and the construction of a new engine plant in Rosario is another example of our commitment to the future growth in the region," Ammann said.
Costantini, meanwhile, said that the new plant that will be installed in the last quarter of the year will let the company "continue improving its trade balance as we will have a new product to be exported to the European markets."
The company, in fact, expect that the beginning of the production of the new aluminum engine, (which will be prepared to meet the Euro 6 standards and meet European standards for emission of CO2) will be of 90,000 units per year, of which they will export 10,000 mainly to the European Union. The projected value of these exports is USD 23.5 million annually.
According to the Ministry of Industry, the production of the engines will start in early 2017. The official statement also said that "the engines will have a gradual increase of the national integration, with a floor of 32% (piece on piece) that could increase up to 50% through the development of local suppliers for block, cylinder heads and other aluminum components".
Under the so-called Project Phoenix, the local subsidiary of GM will manufacture a new global model. According to the Ministry of Industry, 80,000 cars will be produced per year, 80% of which will be exported. The expected income is of about USD 1.2 billion annually.
Date: July 8, 2014.