Toyota to Double Sales in Brazil in Two Years With Plant

Toyota Motor Corp. (7203), Asia’s biggest carmaker, plans to double its sales in Brazil after opening its third factory in the country and announcing a fourth plant dedicated to engine manufacturing.

The factory, located in the city of Sorocaba, about 92 kilometers (57 miles) from Sao Paulo, will produce the Etios compact. Toyota is targeting annual sales of about 70,000 units for the model in Brazil, said Eiichi Tomizawa, who oversees the carmaker’s business in Latin America, in Tokyo last month. That’s the initial capacity of the plant considering two shifts. A third shift could boost capacity to 100,000 cars per year.

“Our goal is to double sales in Brazil within two years,” said Shunichi Nakanishi, who oversees Toyota’s business in Brazil, speaking yesterday at the opening event in Sorocaba. That means selling as many as 200,000 vehicles in the country, according to Nakanishi.

Toyota is expanding output in Latin America’s biggest economy as it seeks to get half its sales from emerging markets by 2015. The automaker’s Japanese competitor Nissan Motor Co. (7201) has said it plans to boost annual production capacity in Brazil to 200,000 units in 2014, from about 50,000 units now.

The company will invest 1 billion reais ($496 million) in an engine factory in Porto Feliz, which should begin production by 2015, Toyota Chief Executive Officer Akio Toyoda said on Aug. 8 in Brasilia.

Toyota rose 1.4 percent to 3205 yen in Tokyo yesterday, taking its gain this year to 25 percent.

Output Drop

In June, industrywide vehicle output in Brazil fell 18 percent from a year earlier, according to data compiled by Bloomberg. Brazil’s economy expanded at a 0.8 percent annualized rate in the first quarter, and analysts surveyed by the central bank estimate 1.85 percent growth this year.

Toyota, which entered the Brazilian market in 1958, plans to introduce its Prius hybrid there in the second half, said Hisayuki Inoue, who heads the company’s Latin America, Africa and the Middle East unit. Brazil total vehicle sales were at 364,196 units in July, up 19 percent from a year earlier, the country’s automakers association, known as Anfavea, said Aug. 6.

Developed by Toyota India in association with Toyota Brazil, the Etios compact is the Japanese company’s attempt to tap the growing middle class in Brazil, as well as in other emerging countries, executives including CEO Toyoda said yesterday.

At first, the Etios won’t be exported from Brazil, Inoue said. Argentina and other Mercosur members will be the first export destinations as soon as Toyota feels comfortable with its supply to Brazilian customers.

The slowing pace of the Brazilian economic growth is no concern to Toyota, said Inoue.

“We don’t have the slightest concern about the Brazilian economy,” Inoue said to an audience that included the country´s Development, Industry and Trade minister, Fernando Pimentel.

To contact the reporters on this story: Jose Sergio Osse in Sao Paulo at josse1@bloomberg.net; Anna Mukai in Tokyo at amukai1@bloomberg.net

To contact the editor responsible for this story: Helder Marinho at hmarinho@bloomberg.net

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