Betim

Question 1

Reasons why fiat chose Brazil

Answer 1

Rapidly growing level of car ownership in Brazil
(1 in 12 in 1980 to 1 in 8 today)
Rapid population growth
Provides a large market
Economic incentives from government
Allows fiat to take its profits out of Brazil back to HQ in Italy
Saves money because the regulations in Brazil are less strict than Italy
19.3 deaths per 100,000 workers in Brazil compared to only 6 in Italy

Question 2

Reasons why fiat chose Betim

Physical

Answer 2

Rich metal deposits
Minas Gerais is Brazil’s steel industry which reduces transport costs
Close to the coats, less than 300km
Most of Brazil’s population lives on the coast
Minimises transport costs to capital

Question 3

Reasons why fiat chose Betim

Human factors

Answer 3

Large cheap labour pool (375,000 and growing)
Wages can be cheap, maximising profits
Excellent transport connection ps to the rest of Brazil
RUF of Betim means that means the site already has sewage, water and electricity.

Question 4

The Betim fiat factory

Answer 4

Fiat HQ in Italy began manufacturing 30 years ago
Betim factory opened in 1976 (40 years ago)
Factory is 2,000,000 m2
Employs 10,000 people
Capable of producing 800,000 cars a year