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November 27, 2007 |
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FIAT: Investing About US$3.4 Billion in Brazil to Fund Expansion Fiat SpA plans to increase production in Brazil to meet rising demand. Published reports say that Fiat's total investment in Brazil will reach US$3.4 billion, where US$2.8 billion will be utilized to increase production at its plant in Betim, from 700,000 cars to one million by 2010. The rest of the funding will be used to develop its factories in Sao Pauolo, AFP says. "For Fiat Auto, Brazil is our second biggest market worldwide, and the State of Minas Gerais has shown itself to be a valued partner throughout the thirty-plus years that we've been present in Brazil," AFP quoted Chief Executive Officer Sergio Machione as saying on Friday. Demand in Brazil has risen as a result of rising employment and cheap car credit financing, Bloomberg News says. The carmaker is keeping abreast with expansion programs that its competitors in Brazil are doing. "I travel the world and Ic haven't seen an economic environment which is stable and as favorable," Mr. Marchionne was quoted by Bloomberg as saying. He added that Fiat's car sales in the country rose to 32% for the first ten months, higher than Brazil's 29% total domestic unit car sales. About Fiat S.p.A Headquartered in Turin, Italy, Fiat S.p.A. -- http://www.fiatgroup.com/ -- is one of the largest industrial groups in Italy and the fourth largest European-based automobile manufacturer, with revenues of EUR33.4 billion in the first nine months of 2005. Fiat's creditors include Banca Intesa, Banca Monte dei Paschi di Siena, Banca Nazionale del Lavoro, Capitalia, Sanpaolo IMI, and UniCredito Italiano. Fiat operates in Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, China, Czech Republic, Denmark, France, Germany, Greece, Hungary, India, Ireland, Italy, Japan, Lituania, Netherlands, Poland, Portugal, Romania, Russia, Singapore, Spain, among others. * * * As reported on Aug. 8, Standard & Poor's Ratings Services raised its long-term corporate credit rating on Italian industrial group Fiat S.p.A. to 'BB' from 'BB-'. At the same time, Standard & Poor's affirmed its 'B' short-term rating on Fiat. S&P said the outlook is stable. "The upgrade reflects Fiat's strong debt reduction achievements, positive trends in the auto sector, and improvements in the group's profitability and cash generation," said Standard & Poor's credit analyst Nicolas Baudouin. As reported in TCR-Europe on Aug. 7, Fitch Ratings changed Fiat S.p.A.'s Outlook to Positive from Stable. Its Issuer Default rating and senior unsecured rating are affirmed at BB-. The Short-term rating is affirmed at B. Around EUR6 billion of debt is affected by this rating action. The Outlook change is underpinned by the consistent improvement of the group's financial profile, the pick-up in Fiat Auto's market shares and earnings since late 2005 and positive expectations for the CNH and Iveco divisions. Fiat carries Moody's Ba3 long-term corporate family rating since July 14, 2003. |
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