Case study: Fiat in Brazil

FACTS

• Fiat is a TNC which produces cars.
• It operates in 64 different countries.
• It opened its first factory in Brazil in 1976 employing 12,000 people.

WHY DID IT BUILD A FACTORY IN BRAZIL?

GOVERNMENT SUPPORT

• In the state of Minais Gerais many incentives were offered to Fiat including grants, loans and cheap land which accounted for 50% of its initial investment.
• The Brazilian government also wanted to develop a motor industry to bring in employment to the country so they encouraged Fiat to locate there.d

LABOUR

• The labour were much cheaper in Brazil. Workers cost $7 an hour in Brazil compared with about $20 in the USA.
• There was also a large pool of available and skilled labour.
• Due to a military government in Brazil, the likelihood of striked against poor pay etc was low.

MARKET

• There would be a guaranteed market for Fiat cars in Brazil as the population is growing in affluence.