Ford announced on Jan. 11 plans to shut down all car manufacturing operations in Brazil. Ford produced cars in Camaçari-BA, Taubaté-SP, and off-road vehicles (Troller) in Horizonte-CE.
The company will keep selling vehicles, especially the Ford Ranger, produced in Argentina and other products from other locations, such as the Transit, Bronco and Escape. Because of this action, Ford Expects an impact of US$ 4.1 billion in non-recurring expenses and a US$ 2.5 billion cash impact.
Source: Press Release Read The Article
PSR Analysis: Ford is reinforcing its strategy of becoming a Truck/LCV, SUV, and special models’ producer rather than a manufacturer of cars. With regards to its regional strategy, Ford is placing its bets on producing in Argentina – it announced the investment of US$ 580 million in December 2020 – rather than Brazil because of its long tradition of producing pick-ups in Argentina.
In the short-medium term, Brazilian dealers’ results will be impacted, and the number of dealers should decrease significantly. At the same time, sales of Ford Ranger should decrease, reducing production in Argentina. Ford may be losing brand sales in Brazil as happened to some OEMs in Argentina when they stopped production in that country. PSR
Fabio Ferraresi is Director, Business Development, South America, for Power Systems Research
