Chrysler Moves into Brazil and Ups Investment in Argentina

08/22/96

Reuters has reported that Chrysler Corporation announced its plans to build a $315 million plant in Brazil and to invest $65 million to boost production at a plant it is constructing in Argentina. Both moves are designed to expand the carmaker's presence in South America. Chrysler has lagged behind both GM and Ford in terms of over-seas expansion.

Chrysler will select a site for the new Brazilian plant by the end of the year, and vehicles are expected to roll off the line beginning in 1998. The Brazilian plant will be Chrysler's third in South America and will assemble Dakota pickups for sale in the Mercosur trade block, which comprises Argentina, Brazil, Paraguay and Uruguay.

In Argentina, Chrysler is building its plant in Cordoba province. Production of the Jeep Grand Cherokee is slated to begin at the plant next April; Jeep Cherokee production will begin at the plant in 1998.

Chrysler Chairman Robert Eaton said, "Our decision to manufacture in Brazil and expand production in Argentina is based on the favorable economic conditions and future growth prospects we see in the Mercosur."

Chrysler's total South American commitment has risen to $735 million, counting the new investments.

Chrysler also announced that engine supplier Detroit Diesel Corporation will establish a new plant in Brazil to make engines for South American made Dakotas and Jeep Cherokees.

Chrysler plans to start selling the recently redesigned Dakota in the United States, soon.

Paul Dever -- The Auto Channel