General Motors (MTLQQ) will add its South American business as another reportable geographical unit to its three existing reportable geographical units. Previously, GM’s reportable units comprised North America, Europe and International Operations.
The new unit, GM South America, will be based in Sao Paulo, Brazil. It will manage sales and manufacturing operations in Brazil, Argentina, Colombia, Ecuador, Venezuela, Bolivia, Chile, Paraguay, Peru and Uruguay.
GM occupies a robust 20% of the South American market. As a result, the company felt the need to create a separate controlling unit to handle rising consumer demand in the region.
The company has appointed Jaime Ardila as the president of the new unit. Jaime Ardila had been in charge of the company’s Mercosur operations, which is composed of four sovereign member states – Argentina, Brazil, Paraguay and Uruguay.
The addition of the South American unit results from a split-up of GM’s International Operations unit. After the new unit takes effect, the company’s International Operations will be responsible for managing the operations in Asia, Russia, Australia and other countries.
GM’s growing interest in its South American business has long been noticed by its increasing focus on Brazil. So far this year, the automaker has invested R$2.1 billion ($1.2 billion) in its Sao Caetano do Sul plant in Sao Paulo to modernize and expand production.
The investment in Sao Paulo focused on renewing the Chevrolet production line, producing two new models and boosting the overall output. It was part of GM’s plan to increase production capacity and refresh its Chevrolet models in Brazil – its third largest market after the U.S. and China. The plan entails a total investment of R$5 billion ($2.8 billion) and would run until 2012.
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