Volkswagen AG will add more models and increase production in Brazil in an attempt to wrestle the top spot away from Fiat S.p.A. in this rapidly growing auto market. In an interview, the head of VW’s Brazilian operations, Thomas Schmall, said that competition in Brazil is “intense” and VW expects it will “become even more intense in the future.”
VW is expanding three of five plants in Brazil to increase sales 40 percent to 1 million vehicles in the next four years, Schmall said. VW is investing EUR2.3 billion ($3.3 billion) in the country through 2014 as a strong currency, a growing middle class and job creation ahead of the 2014 World Cup and 2016 Olympics fuel demand.
According to industry researcher IHS Automotive, auto sales in Brazil, VW's third-biggest market after China and Germany, will grow 40 percent by the end of 2016 to 3.64 million vehicles annually.
In 2011, Fiat leads with a 22.3 percent share of the car and light truck market through mid-March 2011, according to data from Brazilian dealers association Fenabrave.
VW is in second place with 21.8 percent and GM is third with 18.2 percent. VW and Fiat have been trading the top spot back-and-forth, while dealing with the pressure from rivals pouring in to capitalize on the market's potential.
Paulo Sergio Rosa, an automotive consultant from Consultoria Columbia in Sao Paulo, said the country has never experienced a moment such as the present one, “having 45 brands selling their cars here.”