July 16, 2007 -- U.S. car maker General Motors Corp. (GM) will invest $350 million in Argentina to produce a new mid-size car model, Argentine daily La Nacion reported Monday. La Nacion, like other local press reports, says that the investment will be announced by GM Chief Executive Rick Wagoner during his visit to Argentina on Thursday. A GM Argentina spokesman wouldn't confirm the reports of the investment.
Before visiting GM's Argentine plant in Rosario, Wagoner will spend two days in Brazil, the same spokesman said. The GM press office in Detroit wasn't immediately available for comment. GM Argentina President Felipe Rovera in May told Dow Jones Newswires that GM is about to decide whether to produce a new car model in Argentina, Brazil or Mexico. Rovera said that GM will pump $250 million in investments into the selected operations to build 110,000 vehicles annually. If confirmed, the investment comes as Argentina's worsening energy crisis is resulting in gas and power cuts for industrial users, including car makers like GM.
Despite the energy cuts, which have forced industrial companies to cut their local production since the end of May by as much as 40%, Argentina's car production in June rose by 32.7% to 47,573 units from 35,859 units in the same period last year, the Argentine Association of Automotive Manufacturers, or ADEFA, said earlier this month. ADEFA's data came as a surprise and confirmed that the auto industry remained a major driver of Argentina's economic growth, which last year stood at 8.5%, benefiting also from the appreciation of Brazil's currency, the real.
Source: Dow Jones International News
Source: Factiva
